Corn prices remain under pressure from early harvesting in the US and improved harvest forecasts in Ukraine

Corn quotes in Chicago remain at their lowest level since late 2021 pending a new WASDE report, which is likely to downgrade the US crop but raise Ukraine.

Analysts expect the USDA's September report to lower its estimate of the US corn yield and, as a result, the gross side of corn from 383 million tonnes to 381 million tonnes, well above last year's level.

According to NASS USDA, the number of corn crops in good or excellent condition in the U.S. fell 1% for the week to 52% (53% last year), but thanks to hot weather, 34% of the crop is mature and ready to harvest (28% 5-year average years), and already collected 5% % on average).

During the first week of the new season, corn exports amounted to 623,862 thousand tons, compared to 783 thousand tons in the previous week and 474 thousand tons for the same period last year. In total, 37.26 million tons were exported in FY 2022/23 out of USDA's forecast of 41.3 million tons, so the initial stocks of the new season will increase by 4 million tons.

December corn futures on the Chicago Mercantile Exchange rose 0.5% to $185.5/t yesterday, in line with the previous week and month, but 30% lower than last year.

November corn futures on the Paris exchange yesterday fell 0.7% to €211.5/t or $227.3/t (0% for the week, -5.3% for the month, -34% for the year ).

Brazil is increasing corn exports, which is reducing supplies from the US and compensating for blocked exports from Ukraine.

The European agency MARS yesterday increased the corn harvest forecast for Ukraine from 29.11 to 32.79 million tons, which will be 3% less than the 5-year average, and 22% less than the record harvest of 2021.

The pace of corn exports from Ukraine is decreasing due to blocked Black Sea ports. For July-August, only 2.2 million tons of grain were exported, compared to 3.2 million tons for this period last year.

Purchase prices for corn in the Danube ports are falling against the background of higher freight prices and lower export demand prices, especially in the EU countries. Poland insists on extending the ban on grain imports from Ukraine after September 15, which increases the pressure on purchase prices. Due to the lack of export demand, purchase prices at the free elevators of Ukraine fell to 4,200-4,500 hryvnias/ton.

Against the backdrop of the blockade of the Black Sea ports and the continuation of the ban on exports to neighboring EU countries, domestic prices may fall significantly, which will cause significant losses to farmers.