Analysts reduce forecasts of the corn harvest in the EU and Ukraine, which leads to an increase in purchase prices

Dry weather in the Black Sea region reduces the potential for corn harvest this season, so analysts are adjusting production forecasts for the EU and Ukraine.

The European Commission reduced the forecast of the corn harvest in the EU in 2024/25 MR by 11% to 60 million tons (which will exceed the 5-year average by 2%), in particular for Romania – by 1.1 to 9.5 million tons (-10% in comparison with 2023/24 MY), Bulgaria – by 0.4 to 2.6 (+8%) million tons.

The Strategie Grains agency lowered the corn harvest forecast in the EU by 2 to 60 million tons, which will be 4.5% less than the 2023/24 FY.

The FAS USDA representative lowered the corn harvest forecast in the EU from 64 to 59.8 million tons (USDA estimated it at 64 million tons in June).

Markets have yet to react to forecasts of reduced corn production in the EU, as an increase in the share of feed wheat restrains price growth, especially in view of forecasts of good harvests in the US and Brazil.

November corn futures on the Paris exchange fell 0.6% for the week to €204.25/t or $223/t (-1.6% for the month, -12% for the year).

The Ukrainian Grain Association reduced the forecast of the corn harvest in the country in 2024 by 2.1 to 23.4 million tons (-21% for the year), and the ASAP Agri agency - by 5.2 to 24.1 million tons, while the USDA in in July estimated it at 27.7 million tons. Therefore, the USDA may adjust its estimates in August.

In Ukraine, the purchase prices for corn for delivery to the Black Sea ports in October-November remain at the level of $180-185/t SRT, but their growth is restrained by the drop in export prices for fodder wheat to $178-180/t SRT-port.

According to the State Customs Service, Ukraine exported 1.74 million tons of corn in 2024/25 MR (as of August 7) (0.9 million tons for this period last year).

The weather in the US favors the development of crops, which is why analysts have raised their forecast for the harvest to 385-386 million tons, although the USDA estimated it at 383.6 million tons in July.

December corn futures in Chicago fell below the psychological level of $4/bushel or $156.3/t (-2.8% month-to-month, -30% year-to-date) and only the world balance adjustment in the August report can support them USDA.

The export of corn from the USA in 2023/24 MR amounted to 47.88 million tons (with the USDA forecast of 47.7 million tons), which is 36% ahead of the pace of the previous season and will reach 50 million tons by the end of August.

Brazil and Argentina have finished harvesting corn, so the new USDA report may have adjusted production figures.