Purchase prices for corn in Ukraine are actively growing

Purchase prices for corn in Black Sea ports increased by $8-10/t during the week to $154-156/t or UAH 6,600-6,650/t against the background of active export demand, the rise in the dollar exchange rate on the interbank exchange and restraint of sales by producers.

Domestic farmers are not in a hurry to sell, hoping for a further increase in prices, but global quotations remain at a low level in anticipation of Friday's report on stocks and sowing areas in the United States.

Prices for Ukrainian corn were supported by a sharp increase in the price of European corn by 6.5% last week, caused by the intentions of the European Commission to introduce a duty on the import of grain from the Russian Federation.

June corn futures in Paris rose 6.5% to €193.5/t last week, but fell to €191.5/t, or $207.4/t, from Monday as traders began to lock in profits.

The news about active purchases of corn by China at a price of $240-245/t CIF will allow traders in Ukraine to raise purchase prices to $155-160/t with delivery to the port.

The rate of corn export from Ukraine is slowing down. During March 1-25, only 1.95 million tons of corn were shipped (3.1 million tons for the same period last year), and overall for the season, exports amounted to 17.95 million tons of the USDA forecast of 24.5 million tons, while last year in at that time it reached 21.7 million tons.

It is worth noting that May corn futures on the Chicago Stock Exchange fell 1.6% this week to $170.3/t (+1.9% on the month) amid strong corn planting rates in the US south and improved weather in Argentina, where the harvest is accelerating.

Exports of corn from the USA for March 14-21 decreased by 8% compared to the previous week to 1.23 million tons, and in total for the season reached 24.4 million tons, which is 33% ahead of last year's pace. At the same time, the USDA increased the export forecast for 2023/24 MR compared to the previous season by 26.4% to 53.3 million tons.

Ahead of the release of the USDA report, analysts are releasing their own estimates of planted areas. A survey by Kluis Commodity Advisors/Successful Farming showed that U.S. corn acreage will decline from 94.6 million acres in 2023 to 92.5 million acres in 2024, while the USDA currently estimates it at 91 million acres.

According to Safras and Mercado, in Brazil, as of March 22, 97.3% of the planned area was sown with corn of the second crop (94.7% last year). Traders' attention is currently focused on the state of Paraná, where a lack of rainfall is hampering the development of crops.