Weather in South America and lower freight and transshipment costs support corn prices in Ukraine

Over the past week, foreign exchange prices for corn in Ukraine continued to rise amid a slight decrease in transshipment costs, but hryvnia prices were held back by the fall in the dollar exchange rate against the hryvnia.

Export demand prices for corn increased by $1-2/t to $213-215/t with delivery to Black Sea ports, while prices in hryvnia remained at the level of UAH 10,050-10,200/t. It is worth noting the increase in the volume of offers, especially from large agricultural holdings.

The increase in the cost of rail transportation of grain to ports was postponed to March, so farmers are actively using cheap logistics.

In January, Ukraine exported 2.52 million tons of corn, and in total in the 2024/25 season – 12.1 million tons out of the USDA forecast of 23 million tons. Demand for Ukrainian corn will grow in the coming months, especially given the reduced harvest forecasts in South America and the possible introduction of mutual tariffs between the EU and the US.

Rainfall in Argentina is reducing speculative pressure on prices, but heavy rains in Brazil are delaying soybean harvesting and planting of a second crop of corn, boosting demand for May and July futures.

Last week, speculators on the Chicago Board of Trade reduced short corn positions and increased long ones, as a result of which the net long position rose to the highest level since May 2022.

March corn futures in Chicago fell 1.6% to $191.9/t on Friday (+1% for the week, +3.6% for the month), and May futures fell 1.4% to $197/t.

Analysts are awaiting the USDA’s February report, which could lower Argentina’s corn harvest forecast by 1.5 million tons to 49.5 million tons (compared to 50 million tons in MY 2023/24) due to the January drought. However, Brazil’s forecast is likely to remain unchanged (USDA estimated the harvest at 127 million tons in January, and 122 million tons in MY 2023/24).

Rainfall in Brazil is gradually decreasing, which will allow for an increase in the pace of corn planting. However, in the main producing state of Mato Grosso, new rainfall is forecast next week, which could increase soybean crop losses and delay corn planting until the optimal time (until the end of February). On the other hand, heavy rainfall will create a significant moisture reserve in the soil for corn planting, so a slight delay in planting may not affect the crop volume.

Tags: Ukraine, corn, prices