Ukrainian corn export prices continue to grow due to stronger demand

This week corn purchase prices in Ukraine increased by another 3-4 $/t to 162-166 $/t or 7200-7400 UAH/t with delivery to Black Sea ports on the background of active April exports and significant sales volumes for May. Traders raise prices due to reduction of their margins and lower cost of freight and transshipment in ports.

Farmers are busy sowing, so they are holding back sales in anticipation of higher prices, but in a week’s time the volume of offers may increase.

In MY 2023/24, Ukraine exported 22.9 million tons of USDA’s projected 24.5 million tons of corn, including 4.14 million tons in April, while in the previous season these figures were 24.4 million tons and 2.1 million tons, respectively. Another 2.5-3 million tons of corn may be exported in May, but traders will have to pay a premium to purchase these volumes.

A 3.5% drop in oil prices in the near term will increase pressure on the prices of corn and other commodities used in biodiesel production, which, amid increased supply from Argentina, will limit corn price growth in Ukraine.

July corn futures on the Chicago exchange fell during the week, but yesterday rose 0.9% to $177.5/t (+2.2% month-on-month) on the back of higher ethanol production.

In the US, ethanol production rose 33k b/d to 987k b/d during April 20-26 after a 3-week drop. According to Grain Crushings, 11.9 million tons of corn was used for ethanol production in March, up 7.48% from March 2023 and the largest March volume since 2018.

According to NASS, 27% of the planned acreage (22% of the 5-year average) was planted to corn in the U.S. as of April 28, and warm weather with intermittent rains will accelerate seeding in the near term.

The Buenos Aires Grain Exchange reports that in Argentina as of April 24, corn has been harvested on 20% of the area. The number of crops in satisfactory to excellent condition for the week decreased from 64% to 60% (48% last year), but in some regions, especially in the northeast, due to diseases and pests, corn yields decreased. Exchange experts left the forecast of corn harvest in MY 2023/24 at 49.5 million tons (36 million tons in MY 2022/23).

Tags: Ukraine, corn, prices, USA, Argentina