Corn prices in Ukrainian ports remain stable, but have potential for growth

Thanks to the unblocking of the Black Sea ports, Ukraine is increasing its corn exports, but rumors about the possible suspension of grain corridors after November 20 stopped the growth of purchase prices.

Corn prices in Ukraine are 50-70 $/t lower than world prices, so if exports through sea ports continue, they will have the potential for growth. In the near future, they will be supported by increased demand from EU countries, which are increasing imports.

In September, Ukraine exported 2.08 million tons of corn, and in total since the beginning of the season - 4.77 million tons, while last year on this date, exports amounted to 1.43 million tons.

Purchase prices for fodder corn in Black Sea ports remain at the level of UAH 7,400-8,000/t or $188-215/t. The volume of offers of the old crop is still significant, so the arrival of the new crop will increase the pressure on prices. The rains should end this week, which will allow farmers to start harvesting, but the first batches of the new crop will appear on the market at the end of the month.

The export demand prices for Ukrainian corn are $250-260/t DAP - the border with the EU, but for batches with delivery to the cities of Romania and Hungary, they offer 270-310 €/t DAP, to the port of Constanta - 280-290 €/t DAP. This confirms the sharp reduction of the harvest in these countries, which are the main producers of corn in the EU.

The European Commission lowered the forecast for corn production in the EU in 2022/23 FY from 59.3 to 55.5 million tons (72.7 million tons in 2021/22 FY), and increased the import forecast from 20 to 21 million tons (16.3 million t in 2021/22 MR).

November corn futures on the Paris Euronext for the week rose by 1.6% to €340.75/t (+7.5% for the month) or $334.24/t, which will support Ukrainian corn prices.

December U.S. corn futures on the Chicago Mercantile Exchange rose 2.2% to $268/t for the week on data from a September 1 inventory drawdown to a level well below analysts' expectations.

Corn is being actively harvested in the USA, which has already been threshed on 20% of the area, which is 2% less than the 5-year average. Corn exports from the US for the week rose 20% to 661.7 thousand tons thanks to good demand from China and Mexico, and the season total reached 2.358 million tons, which is 3.9% ahead of last year's pace.