Export prices for corn in Ukraine are increasing against the background of a decrease in the cost of freight

Corn export prices in Ukraine continue to rise amid lower sea freight costs, forcing processors to raise purchase prices to build up raw material stocks.

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

Purchase prices for corn during the week increased by $3-4/t to $159-161/t or UAH 7,000-7,100/t with delivery to Black Sea ports, with prices in hryvnia growing more slowly due to the stabilization of the dollar exchange rate at 39.5 UAH/$. Against the background of increased competition with exporters, processors raised prices to UAH 6,300-6,700/ton with delivery to the factory. Farmers are busy with sowing, so they reduced the volume of offers, but in a week they will be able to resume sales.

In FY 2023/24, Ukraine exported 22 million tons of corn (from USDA's forecast of 24.5 million tons), in particular, in April - 3.25 million tons, while last year these figures were 24 million tons and 1.67 million tons, respectively.

Speculative growth of quotations for European and American corn against the background of frosts in the USA, heat in Brazil and delays in harvesting in Argentina supports prices in Ukraine.

For the week, May corn futures on the Chicago Stock Exchange rose 3.2% to $173.6/t (+1.8% on the month), while June futures on the Paris Exchange rose 5.2% to €207.5/t or $222.5/t (+8.2% for the month).

In the US, prices have been pressured by a reduction in ethanol production over the past 3 weeks. Next week, the President's administration may introduce new tax incentives for biofuel producers, which will support the quotation.

According to NASS, 12% of the planned acreage was planted with corn in the US on April 21 (10% of the 5-year average), and warm weather with periodic rains will allow planting to accelerate next week.

According to forecasts, the production of corn in South Africa in 2024 will decrease by 18.49% compared to the previous year, from 16.4 to 13.39 million tons due to a decrease in productivity to 5.08 tons/ha, although the sowing area will grow by 1.03 % to 2.63 million ha.

According to the Buenos Aires Grain Exchange, 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.

Global corn prices will remain under pressure from weather factors in the coming months, so speculative spikes are possible, although the overall market is affected by large inventories and reduced demand.