Price Fluctuations in Ukraine
The Ukrainian corn market witnessed a rapid increase in purchase prices over the past month, rising by 13-14.5% from139-144 to 159-163 EURO per ton. However, rumors circulating on April 3 about the cancellation of contracts for Ukrainian corn by China caused a collapse in purchase prices, with some traders lowering prices by $8-10 per ton.
Market Dynamics and Global Factors
The surge in corn prices in Ukraine was partly attributed to the devaluation of the hryvnia, coupled with rising dollar prices in the Black Sea ports. Meanwhile, on world stock exchanges, corn quotations rose due to forecasts of a significant reduction in corn sowing areas in the USA and unfavorable weather conditions for sowing the second crop in some Brazilian states.
Impact of Chinese Market and Import Policies
Reports suggest that China plans to increase the sowing of high-yielding GMO corn varieties in 2024 while encouraging importers to reduce grain supplies to support the domestic market. This has led to fluctuations in Dalian corn prices, rebounding after rumors of an unofficial import cap.
Export and Production Forecast
In 2023/24, Ukraine exported 19.13 million tons of corn, lower than USDA’s forecast of 24.5 million tons. However, with favorable prices, farmers are expected to sell the remaining volume, especially given higher prices for the new crop.
Global Corn Market Outlook
May corn futures on the Chicago Stock Exchange remained largely unchanged for the month despite oil price increases and forecasts of a decline in US corn planting areas. Brazil expects a favorable corn crop season, albeit with some regions experiencing precipitation deficits.
Competition and Trade Dynamics
Corn from Brazil is not expected to enter the market until July, allowing Ukraine and Argentina to compete with corn from the USA, particularly in the Chinese market. The EU’s reduced corn imports from 21.9 to 13.5 million tons compared to the previous season further impacts the demand for Ukrainian corn, increasing its reliance on exports to China.