Export prices for corn in Ukraine are growing amid lower freight costs

Export prices for corn in Ukraine continue to rise amid lower sea freight costs, and processors are forced to raise purchase prices to accumulate stocks of raw materials.

Last week, freight rates for grain transportation from the ports of Odesa and the Danube decreased by 3-5 USD/t, most of all in the direction of China and Spain. Rates for transportation by panamax from the ports of Odesa to China fell by $4/t to 54-56 $/t, and for the transportation of feed wheat to Vietnam – by $4/t to 52-54 $/t, while a month ago they reached 62-65 $/t.

Purchase price of corn during the week increased by 3-4 $/t to 159-161 $/t or 7000-7100 UAH/t with delivery to the ports of the black sea, and prices in hryvnia grew more slowly due to the stabilization of the dollar at 39.5 UAH/$. Amid increased competition with exporters, processors raised prices to 6300-6700 UAH/t with delivery to the plant. Farmers are busy with sowing, so they have reduced the volume of offers, but in a week they will be able to resume sales.

In 2023/24 MY, Ukraine exported 22 mln tonnes of corn (out of 24.5 mln tonnes forecasted by USDA), including 3.25 mln tonnes in April, while last year these figures were 24 mln tonnes and 1.67 mln tonnes, respectively.

Speculative growth of quotations for European and American corn amid frosts in the United States, heat in Brazil and delayed harvest in Argentina supports prices in Ukraine.

During the week, the may corn futures on the Chicago stock exchange rose 3.2% to 173,6 $/t (+1.8% for the month), and the June futures on the stock exchange in Paris – by 5.2% to 207,5 €/t or 222,5 $/t (+8.2% for the month).

In the United States, prices are under pressure from a decline in ethanol production over the past 3 weeks. Next week, the Presidential administration may introduce new tax incentives for biofuel producers, which will support quotes.

According to the NASS, in the United States on April 21, corn planted 12% of the planned area (10% on average for 5 years), and warm weather with intermittent rains will allow next week to accelerate sowing.

According to forecasts, corn production in South Africa in 2024 will decrease by 18.49% from 16.4 to 13.39 mln tonnes compared to the previous year due to the decrease in yield to 5.08 t/ha, although the planted areas will increase by 1.03% to 2.63 mln hectares.

According to the grain exchange of Buenos Aires, in Argentina, the number of corn crops in good condition decreased by 3% to 17%, and in poor condition – increased by 4% to 40% due to excessive rainfall and plant diseases.

World corn prices will remain under pressure from weather factors in the coming months, so speculative jumps are possible, although in general the market is affected by significant stocks and reduced demand.

Tags: Ukraine, corn, prices