Ukrainian corn enters the risk zone

Against the backdrop of high corn prices, Ukrainian farmers have already exported about 1.8–1.9 million tons and are still maintaining good shipment rates. At the same time, the situation on the global market may soon change.

This is reported by analysts of the PUSK agricultural cooperative, established within the VAR.

“Today, Ukrainian corn looks quite expensive on a global scale. For example, we offer corn to the Spanish market at a price of $257–260 per ton, while Argentine products arrive $10–15 cheaper — at $245–248. As a result, key consumers in the EU are currently not demonstrating active demand. In addition, new batches of Argentine grain are expected to be released in April, which will put even more pressure on prices,” PUSK analysts note.

At the same time, in Brazil, according to satellite monitoring data, the level of soil moisture is decreasing in the so-called “small” states, which account for almost 45% of corn production. In the event of further deterioration of weather conditions, this may affect yields and become a trigger for a new price increase.

“The climate in Brazil has a clearly pronounced seasonality: first there are heavy rains, then prolonged heat without precipitation. If moisture reserves are not accumulated sufficiently, corn will not form the necessary vegetative mass. As of the end of March, there is a tendency to reduce soil moisture, and the risk zone is gradually expanding. If this continues, we may see a new round of price growth in May,” predicts the PUSK.

So far, positive news comes only from Turkey, which has reduced the duty on corn imports and opened a quota. It is the demand from this direction that is currently supporting prices for Ukrainian corn. However, according to experts, the quota may be enough for a week, provided that there is active trading.

“The current price of corn on the SRT-port basis of over $230 per ton is actually the price for Turkey. As soon as it exhausts the quota, the market may drop to $215–220 in April, which corresponds to seasonal patterns. Against this background, farmers should carefully weigh the decision to sell,” add PUSK analysts.

Thus, the situation on the corn market remains twofold: in the short term, a drop in prices is possible, but in the medium term — with a negative scenario in Brazil — an increase in May-June is not ruled out. Ukrainian producers should closely monitor weather conditions in South America and be prepared for both scenarios.

Tags: Ukraine, corn