Analysts lower corn harvest forecasts in the EU and Ukraine, leading to higher purchase prices

Dry weather in the Black Sea region reduces the potential of corn harvest this season, so analysts are adjusting production forecasts for the EU and Ukraine.

The European Commission lowered the forecast of corn harvest in the EU in 2024/25 MY by 11% to 60 mln tonnes (which is 2% higher than the 5-year average), in particular for Romania – by 1.1 to 9.5 mln tonnes (-10% compared to 2023/24 MY), Bulgaria – by 0.4 to 2.6 (+8%) mln tonnes.

Strategie Grains lowered the forecast of corn harvest in the EU by 2 to 60 mln tonnes, which is 4.5% down from 2023/24 MY.

The representative of FAS USDA lowered the forecast of corn harvest in the EU from 64 to 59.8 mln tonnes (in June USDA estimated it at 64 mln tonnes).

The markets have not yet reacted to the forecasts of a decrease in corn production in the EU, as the increase in the share of feed wheat restrains the growth of prices, especially given the forecasts of a good harvest in the US and Brazil.

the November corn futures on the stock exchange in Paris for the week fell by 0.6% to 204,25 €/t or 223 $/t (-1.6% for the month, -12% for the year).

The Ukrainian Grain Association lowered its forecast of corn harvest in the country in 2024 by 2.1 to 23.4 mln tonnes (-21% y/y), and ASAP Agri agency – by 5.2 to 24.1 mln tonnes, while USDA estimated it at 27.7 mln tonnes in July. Therefore, USDA may adjust its estimates in August.

In Ukraine, the purchase price of corn for delivery to the Black Sea ports in October – November remain at 180-185 $/t CPT, but their growth is restrained by the fall in export prices for feed wheat to 178-180 $/t CPT port.

According to the State Customs Service, Ukraine exported 1.74 mln tonnes of corn in 2024/25 MY (as of August 7) (0.9 mln tonnes in the same period last year).

The weather in the United States contributes to the development of crops, so analysts have raised crop forecasts to 385-386 million tons, although USDA in July estimated it at 383.6 million tons.

the December corn futures in Chicago fell below the psychological level of 4 $/bushel or 156,3 $/t (-2.8% for the month, -30% for the year), and they can only support the adjustment of the world balance in the August USDA report.

Corn exports from the U.S. in 2023/24 MG amounted to 47.88 million tons (with the USDA forecast of 47.7 million tons), which is 36% ahead of the previous season and will reach 50 million tons by the end of August.

Brazil and Argentina have completed corn harvesting, so the new USDA report may adjust the production data.

Tags: Argentina, crop forecast, Ukraine, corn, Brazil, EU, prices, USA