Purchase prices for corn in Ukraine are increasing, but they are restrained by the drop in export rates

In Ukraine, at the beginning of January, corn prices traditionally begin to rise due to the limited volume of offers and increased export demand. However, this year prices are also affected by the unharvested harvest and the blocking of the grain corridor by Russian inspectors at the SCC.

Purchase prices for corn in the ports of Ukraine rose to $206-208/t or UAH 7,700-7,900/t, but due to the delay of ships in some ports queues of motor vehicles formed for 4-5 days, and some do not accept corn for several weeks.

As of January 15, 109 ships are awaiting inspection in the Bosphorus, as Russian inspectors refuse to work after 3:30 p.m., so they have time to inspect only 2-3 ships per day when 10-15 ships are needed.

In 2022/23 MR, Ukraine exported 13.8 million tons of corn (13 million tons on this date last year) out of the 20.5 million tons predicted by the USDA, in particular from January 1 to 16 – 1.1 million tons (2 million tons last year).

Prices are supported by increased demand for Ukrainian corn from China, where it is traditionally sold at a premium. In 2022, compared to the previous year, China reduced corn imports by 27% to 20.6 million tons, in particular in December - by 34.9% to 0.87 million tons. This confirms forecasts of a reduction in corn imports by China, against the background of increasing supplies from Brazil may reduce the demand for Ukrainian corn.

According to the Ministry of Agriculture, on January 15, 23.5 million tons of corn were threshed from 3.6 million hectares or 85% of the area with a yield of 6.57 tons/ha and normal quality. Warm weather with precipitation in the coming week will not allow harvesting to continue.

March corn futures in Chicago rose to $268.2/t this week, but further growth will be limited by another drop in oil prices amid pessimistic macroeconomic data from the US and China.

Forecasts of abundant rainfall in Argentina will reduce the speculative impact of the weather factor in the near future, especially given the completion of corn sowing and the high forecasts of local analysts estimating the harvest at 50-52 million tons compared to 49.5 million tons in the previous season.