Lower corn harvest forecasts in the EU support corn prices in Ukraine

Last week, Strategie Grains experts lowered the forecast for corn production in the EU in 2022/23 from 55.4 to 52.9 million tons, which would be 34% less than last year’s harvest and 20% less than the initial June forecast of 66.8 million tons. At the same time the estimate of corn imports from Ukraine was increased from 9 to 10.4 million tons compared to 8 million tons in 2021/22 FY.

On September 16, the Coceral agency lowered its forecast for the corn harvest in the EU in the 2022/23 FY to 51.9 million tons compared to 70.2 million tons in the 2021/22 FY.

According to FranceAgriMer, 14% of corn has been threshed in France, and 43% of crops are in good or excellent condition, compared to 89% a year ago.

Agritel analysts report that the first harvest data indicate a very low corn yield in France, so the production forecast has been reduced to 10 million tons compared to 15.2 million tons last year.

European corn prices, however, did not react to lower crop forecasts, with November futures on Paris’ Euronext trading at €328/t or $327.8/t during the week, though up 3.1% since the start of September.

On the Chicago Stock Exchange, December US corn futures fell 1.1% to $266.5/t under pressure from reduced export sales and low export rates for the week, while October Black Sea corn futures fell 3.3% up to $304.5/t.

According to the USDA, export sales of corn from the USA in 2021/22 MR amounted to 60.8 million tons (-13% for the year) against the USDA forecast of 62.87 million tons, and 59.7 million tons were actually shipped, of which up to Mexico – 16.7 million tons, China – 14.3 million tons, Japan – 10.2 million tons, Colombia – 4.4 million tons.

During the week of September 2-8, export sales of corn from the USA for delivery in the 2022/23 MR decreased by 28.5% to 583 thousand tons, and total exports since the beginning of the new season reached 12.3 million tons, which is 50% lower than last year’s pace .

In the global market, the competition with Brazil is intensifying, which will start supplying corn to China from September, which will sharply reduce export sales in the USA and Ukraine, which have traditionally been the main suppliers of grain to the People’s Republic of China.

Increased demand for Ukrainian corn from the EU may improve export prospects for Ukraine, especially given the increase in supplies through the western borders. Demand prices on the basis of DAP-borders have increased to $245-250/t, which will support prices for deliveries to Black Sea ports.

Tags: prices, Mexico, USA, Colombia, Japan, Ukraine, China, corn, Brazil, EU