Growth of corn prices in Ukraine stopped amid falling world prices

The completion of the planting season in the US and improved condition of corn crops in the US and Ukraine increased pressure on global prices. This stopped the growth of prices in Ukraine, which continue to receive support from the gradual increase in export prices for feed wheat.

According to the NASS, as of June 2, 91% of the planned areas were planted with corn in the United States (95% last year, 89% on average for 5 years), and 75% of the crops are in good or excellent condition (64% last year).

During the week on the Chicago stock exchange, July corn futures fell by 3.4% to 172.9 $/t (-6.6% for the month), and December futures – by 4.3% to 180.7 $/t (-6.3%) and are now trading 10% cheaper than last year. Recall that in June 2023, amid unfavorable weather, prices reached $220/t, but declined during the season under pressure from low export demand.

On the Euronex exchange during the week, the August corn futures fell by 1.6% to 223,25 €/t or 243,4 $/t (+7.6% for the month), and November – by 2.8% to 221,5 €/t (+5.5%).

According to the European Commission, in 2023/24 MY the rate of corn imports to the EU decreased by 32% compared to the previous season to 17.1 mln tonnes (with the USDA forecast of 21 mln tonnes), of which 11.6 mln tonnes were supplied from Ukraine. Spain imported 7 mln tons of corn, the Netherlands – 2.3 mln tons, Italy – 2 mln tons.

In Ukraine, as of May 31, 3.9 million hectares or 97.5% of the planned area was planted with corn. The recent rains will improve the condition of crops, and low temperatures in the next 7-10 days will contribute to the development of plants.

Purchase price of corn after the decline last week again recovered to 182-185 $/t or 8300-8400 UAH/t with delivery to the ports of the black sea. They are supported by the increase in feed wheat prices by another 8-10 $/t to 9100-9300 UAH/t, caused by the rise in food wheat prices to 210-215 $/t.

In 2023/24 MY (as of June 3), Ukraine exported 26.6 mln tonnes of corn (27.1 mln tonnes as of the same date last year), while USDA forecasted 26 mln tonnes. By the end of the season, it is possible to export another 1.5 million tons of corn, which will significantly reduce ending stocks.

In the near future, prices may be supported by the data on corn harvest in Brazil and Argentina. As of May 30, in Brazil, the second crop corn was harvested on 4.7% of the area (1.4% last year), and AgRural agency lowered the harvest forecast in 2023/24 MY to 118.4 mln tonnes, which is significantly lower than USDA forecast of 122 mln tonnes and 137 mln tonnes harvested last year.

Tags: Ukraine, corn, prices