Source: Ukragroconsult (Ukraine)
During the week, purchase prices for corn in Ukrainian ports increased against the background of brisk demand from importers, tight supply from producers, low transitional stocks and the heat in July, which had a negative impact on the formation of late crops.
Since Monday, demand prices for corn have risen by USD 13-17/ton to USD 170-181/ton CPT port.
According to the Ukrhydrometeorological Center, agrometeorological conditions in Ukraine were unfavorable for the formation of late crops, as 30-50% of cultivated areas were affected by drought. At the current stage of development, corn is most affected by the effects of high temperatures, as it requires maximum moisture during the flowering period. In many areas, due to the reduction of productive moisture reserves to critical levels and heat stress, persistent wilting and complete growth arrest, yellowing and drying of leaves, stems and sometimes plants can be observed. The heat sterilizes the pollen, exacerbates dust formation in the plants and leads to the formation of cobs between the grains, which ultimately reduces maize yields.
Rainfall over the past week has brought temperatures down to normal levels and slightly improved crop conditions, but in the Southeast, crops have been hit very hard. Lower corn crop forecasts in Ukraine and France are supporting prices for the new crop, but its growth will be limited by low prices for feed wheat and Chicago corn.
Local agencies expect Ukraine to harvest 24 million tons of corn this year, 21% less than last year.
The Russian agency ICAR lowered its forecast for the maize harvest in Russia by 3 million tons to 14 million tons (17 million tons in the previous year) due to the heat wave in the southern and central districts. The SovEcon experts reduced their forecast for maize production in Russia from 14.6 to 13.4 million tons.
Against this backdrop, forward prices for corn deliveries to Black Sea ports rose by USD 10-15/ton to USD 170-180/ton in September-November, which corresponds to the level of prices for feed wheat.
According to the State Customs Service, Ukraine exported 1.39 million tons of corn in the 2024/25 marketing year (as of 24 July) (915,000 tons in the same period last year).
December corn futures in Chicago rose by just 1.5% to USD 164.5/tonne over the course of the week, failing to respond to forecasts of a smaller harvest in the EU, Ukraine and France, as the weather in the US favors a good harvest.
MARS lowered its EU corn yield forecast from 7.55 tons/hectare to 7.24 tons/hectare, which would be 2% below the five-year average of 7.35 tons/hectare.
August corn futures in Paris rose 3.9% this week to 220.5 euros/ton, or $239/ton, which will support Black Sea corn prices.
According to the Conab, 79.6% of Brazil’s second-crop corn was harvested on July 21 (47.9% last year), but rains are delaying the harvest.
Corn from Argentina and Brazil will dominate the world market in the coming months, but demand for Black Sea corn will increase from September and drive up prices.