A decrease in the supply of corn in Ukraine led to an increase in demand prices

During the week, corn prices for delivery to Black Sea ports were $148-153/t, but hryvnia prices rose by UAH 50-100/t to UAH 6,100-6,250/t against the backdrop of the dollar’s rise. Producers continue to hold back sales and finish harvesting.

According to the Ministry of Agriculture, as of January 25, 58.724 million tons of grain and leguminous crops were harvested in Ukraine from 97% of the area or 10.576 million hectares with a yield of 5.55 tons/ha. At the same time, 28.48 million tons of corn were threshed from 90% of the area or 3.657 million hectares with a yield of 7.79 tons/ha. In particular, another 48,000 tons of grain were collected over the last week. USDA experts estimate the harvest in Ukraine at 30.5 million tons, but if due to unfavorable weather it is not possible to harvest from 10% of the areas, then the loss of 2 million tons of corn may lead to an increase in prices.

Global corn prices remain under pressure from increased crop forecasts in Argentina and weak export rates from the US. Experts at the Buenos Aires Grain Exchange BAGE raised the forecast for the corn harvest in Argentina by 1.5 million tons to 56.5 million tons (34 million tons in the previous season), while the USDA estimates it at 55 million tons.

Active planting of second-crop corn and favorable rainfall in Brazil could boost crop forecasts, which are currently down to 117-119 million tonnes by local agencies (compared to 137 million tonnes last season), although the USDA estimates it at 127 million tonnes.

March corn futures on the Chicago Mercantile Exchange fell 1.2% to $175.7/t on Friday on data showing a 29% drop in ethanol production for the week and weak exports.

Speculative increases in oil prices have yet to support corn prices, which are under pressure from reduced demand from the ethanol industry.