Corn prices in Ukraine have started to fall again

The increase in the cost of freight and insurance of ships from the Black Sea ports of Ukraine, as well as the decline in the dollar exchange rate on the interbank market, stopped the growth and even reduced the purchase prices for corn in Ukraine.

 

In addition, farmers listened to our advice and increased corn sales, while traders canceled some of the ships they had announced for January, which reduces the need for supplies.

 

The dollar exchange rate on the interbank market, after reaching the level of 43.3 UAH/$, rolled back to the level of 43.15/43.18 UAH/$, which stopped the growth of hryvnia prices.

 

A sharp drop in corn quotes in Chicago by 6% after another increase in the global harvest forecast reminded that the market is oversupplied and may experience a new wave of pressure on prices with the start of the harvest in Argentina.

 

Export demand prices for corn in Ukraine decreased by 100-150 UAH/t to 9850-9900 UAH/t or $202-205/t with delivery to Black Sea ports since Monday.

 

Severe frosts and snowfalls have practically stopped the corn harvest, and about 9% of the area remains unharvested (equivalent to 2-3 million tons). In total, as of January 8, 28.661 million tons of corn have been harvested from 4 million hectares or 91% of the projected area, with an average yield of 7.16 tons/hectare.

 

March corn futures in Chicago fell to their lowest level since August at $166/t, down 4.3% from a month ago, and will continue to be pressured by the seasonal spring supply surge.

 

South Korean company Cargill Agri Purina purchased 68,000 tons of feed corn (out of a planned 140,000 tons) at an international tender on January 14 for delivery from March 22 to April 21 at a price of $250.89/ton C&F (plus a surcharge for unloading at another port of $1.5/ton), which is slightly higher than the purchase price last week. However, the small volume purchased indicates expectations of a turnaround in the physical market.

 

Recall that on January 9, other South Korean companies purchased corn for delivery between April 15 and 30 at a price of $249.6-249.9/t C&F (+$1.5/t for additional unloading at the port), while in October, purchase prices were $235-236/t C&F, so the market may return to these levels again.