Purchase prices for corn in Ukraine are increasing against the backdrop of speculative wheat price increases

A sharp speculative increase in wheat prices, caused by frosts in the Russian Federation and the USDA's forecast of a decrease in global ending stocks in 2024/25 MR, increased the pressure on corn quotes, which have no fundamental support factors, as the harvest and stocks are expected to be quite high.

During the week, the purchase prices for corn in Ukraine rose by $5-8/t to $170-175/t or UAH 7,600-7,800/t with delivery to Black Sea ports against the backdrop of an increase in feed wheat prices by $10-12/t to $175-178/t or UAH 7,900-8,000/t and active export demand in the period of seasonal supply reduction.

In 2023/24, Ukraine exported 24.07 million tons of corn (25.7 million tons last year), in particular, 1.17 million tons from May 1-13 (1.05 million tons for the same period in 2023). In May, USDA experts increased the forecast of corn exports from Ukraine in 2023/24 from 24.5 to 26 million tons, but lowered the forecast for the harvest in 2024/25 to 27 million tons (31 million tons in 2023/24), and exports - up to 24 million tons

As of May 10, 2.84 million hectares or 71% of the planned area (58% last year) were sown with corn in Ukraine. Dry and warm weather will allow sowing to be completed at the optimal time, and rains will pass at the beginning of next week.

July corn futures on the Chicago Stock Exchange rose 3.5% on the USDA report, but fell 1% yesterday to $184/t (+5.4% on the month), while wheat futures for the price rose by 7.8% in two sessions. December futures fell 0.4% to $193.3/t yesterday (+4.7% on the month), but are 5% above old-crop quotes amid delayed US planting.

According to NASS, 49% of the planned area was sown with corn in the USA on May 12 (60% last year, 54% on average over 5 years). The rains delay sowing, but dry and warm weather in the next 8-10 days will speed up the work.

USDA experts lowered Brazil's corn crop forecast from 124 million tons to 122 million tons in a May report, while local agency CONAB raised its forecast by 0.672 million tons the other day to 111.64 million tons due to an increase in second-crop corn planting area. The ending stocks forecast was raised from 5.5 to 6.2 million tons (7 million tons last year), while the export estimate was left at 31 million tons (54.6 million tons last year). According to CONAB data, on May 12, corn of the first harvest was collected on 68.1% of the area (72.4% last year).

According to the Grain Exchange of Buenos Aires, in Argentina on May 8, corn was threshed on 23.4% of the area, and dry weather in the near future will allow to speed up harvesting.

The delay in the supply of corn from Argentina increases the demand for Ukrainian corn. But due to the heat in Brazil, second-harvest corn may enter the market as early as July, so Ukrainian producers should sell their stocks by then.