Ukrainian corn is at the center of the world market amid weather risks in South America

The world corn market is currently operating stably, but in fact has only two active sellers – Ukraine and the USA. At the same time, the USA mainly works in the forward segment with deliveries in April-May, while Ukraine remains a key supplier of spot corn with deliveries in February-March. This creates increased interest of importers in Ukrainian grain in the short term. This is reported in the analytical department of the agricultural cooperative PUSK, created within the VAR.

The main external factor for corn prices remains the situation in South America.

“In Brazil, there is a delay in corn sowing due to drought in the southern regions and the expectation of precipitation. The situation in Argentina is also tense: the southern regions are suffering from heat and uneven precipitation. There is a high probability that Argentina will not be able to actively export in March, and this will further support the market,” analysts note.

Against this background, Ukraine demonstrates high export activity. “In the first days of February, about 700 thousand tons of corn have already been shipped, and total exports in February may reach 2.6–2.7 million tons, with a potential of up to 3 million tons. In January–March, Ukraine traditionally loads export channels to the maximum, and this year additional demand is generated by importers who were counting on cheaper Argentine corn. In fact, there is only one seller left on the spot market — Ukraine, and this works to increase prices,” the PUSK explains.

Price dynamics on the domestic market already reflect the above factors.

“Corn in ports is conditionally traded at $214–216/t, and in hryvnia equivalent — about UAH 10,350–10,500/t. This week, the market may consolidate in the range of 10,500–10,550 UAH/t, and in the medium term, the potential for gradual growth of 1–2 $/t per week remains. Fluctuations are possible after the publication of the USDA report, but they will be short-term and will not change the general trend,” analysts believe. Forecasts for the end of February and March remain positive.

“If weather conditions in Argentina do not improve, Ukrainian corn may rise in price to 220 $/t and above, and the seasonal model allows for levels of 230–235 $/t CPT in February–April,” the PUSK summarizes.

Tags: Ukraine, corn, export, prices