Purchase prices for corn in Ukraine are falling, despite increased purchases in ports

Purchase prices for corn in Ukraine are falling on all bases against the background of harvesting the new crop.

As of October 6, 2.585 million tons of corn were threshed from 414 thousand hectares or 10% of the area with a yield of 6.25 tons/ha. As a result of the September heat and lack of precipitation this year, corn has a fairly low moisture content and does not need drying, which will reduce farmers’ expenses.

The pace of corn exports is inferior to last year. Thus, from July 1 to October 5, Ukraine exported 2.785 million tons of corn compared to 5.284 million tons during this period last year. However, this is due to significantly smaller transitional balances in the current season and, as a result, smaller deliveries in July – September.

Demand prices for fodder corn decreased by $10-15/t to $125-135/t for deliveries to Danube ports and to $95-120/t for deliveries to Black Sea ports. As a result, prices on an ex-elevator basis fell by UAH 200-500/t to UAH 3,500-4,000/t.

Corn prices for CIF-China delivery remain at $260-270/t. Given the decrease in freight costs from Ukraine to China from $100/t to $70-75/t, corn prices in Ukraine should be $180-185/t FOB Odesa. Taking into account the transshipment cost of 15-20 $/t, it turns out that traders lay down an additional margin of 40-45 $/t to compensate for possible costs due to idle ships or loss of cargo.

In general, global corn prices remain under pressure from active exports from Brazil and seasonal increases in supply in Ukraine and the United States. At the same time, the decline in oil prices and the slowdown in the world economy will continue to reduce the demand for corn.

Tags: Ukraine, corn, prices