Corn prices in Ukraine remain in anticipation of increased exports from the Black Sea ports

The purchase prices for corn in the ports of Ukraine remain at the level of UAH 7,000-7,300/t or $175-200/t, despite forecasts of a sharp reduction in the harvest in the USA and the EU, since significant stocks of the old crop have been accumulated in the ports, and against the background of the successes of the Armed Forces of Ukraine on on the eastern and southern fronts, rumors about Russia blocking the operation of grain corridors after November 1 are intensifying.

According to APC-Inform, at the beginning of the 2022/23 FY, corn stocks amounted to 7.7 million tons, which is 3.8 times higher than the average, while the USDA estimated them at 5.57 million tons in September. In recent months, through the western borders and Danube ports, almost 1 million tons of corn were exported, and the restoration of supplies through the Black Sea ports will allow to increase the export of corn to 2 million tons in September.

According to the State Customs Service, in the 2022/23 FY as of September 14, Ukraine exported 3.424 million tons of corn, of which 0.73 million tons were in September.

Global corn prices remain under pressure from weak demand and strong supply from Brazil, where the second harvest has been completed. According to ANEC estimates, Brazil exported 6.9 million tons of corn in August and will ship 6.31 million tons in September, compared to 2.55 million tons in September 2021. Against the backdrop of favorable weather for the first corn crop of 2022/23 MR in the country is sown on 17% of the area.

Today, after a three-week hiatus due to the idle program, data on US exports will be released, and the market will receive information on the demand for US corn, of which approximately 2 million tons were exported in August. According to forecasts, the corn harvest in the United States will be 29 million tons lower, than last year, but so far this has not affected prices as domestic demand from ethanol producers falls amid falling oil prices.

According to the EIA, during September 3-9, ethanol production in the US decreased by 2.7% to a 22-week low of 963,000 barrels/day.

November Brent oil futures remain at $94/barrel under pressure from weak demand from China, where quarantine restrictions due to Covid-19 continue.

The prospects for concluding a nuclear agreement with Iran remain uncertain, especially given the supply of Iranian drones to the Russian Federation, one of which has already been shot down by the Armed Forces of the Russian Federation. Therefore, we should not expect cheap Iranian oil on the market in the near future.

According to the IEA, OPEC+ countries in August increased oil production by 590,000 barrels per day to a 2.5-year high of 29.64 million barrels per day, but it remains 2 million barrels per day below quotas due to supply disruptions and capacity shortages in Libya and Nigeria.

In France, MSG predicts a 25% drop in corn production to a 32-year low of 11.3 million tons.

In Chicago, December US corn futures fell 1.5% to $268.58/t yesterday, and October Black Sea corn futures fell 0.6% to $309.5/t, down 1.7% from Monday. %.