Decline in Export Demand
The robust export demand for Ukrainian corn observed in April and May facilitated the export of approximately 7 million tons of corn over the past two months. As of June 19, Ukraine has exported 28.19 million tons of corn since the beginning of the 2023/24 marketing year, nearly matching last year’s figure of 28.18 million tons. However, the USDA forecasted only 26 million tons for this period.
Falling Purchase Prices
Purchase prices for corn have continued to decline over the past week due to the closure of export programs by major traders. Prices have dropped to around $170 per ton or 7800-7900 UAH per ton delivered to Black Sea ports, down from a seasonal peak of around $185-188 per ton. Forward prices for new crop corn have also decreased from the previously offered $170-175 per ton to $160 per ton for delivery in October-November.
Impact of Feed Wheat Prices and Planting Conditions
The decline in feed wheat prices and improved conditions for corn planting in both Ukraine and the US are expected to continue pressuring prices in the near future. In Ukraine, 3.93 million hectares were sown with corn in 2024, representing 100.4% of the planned areas. June rainfall and moderate temperatures have contributed to improving crop conditions.
US Corn Planting Progress
According to NASS, as of June 16, 100% of the planned corn areas in the US have been planted, with 93% emergence compared to 95% last year. The rating for crops in good and excellent condition decreased by 2% over the week to 72%, compared to 55% last year.
Global Market Trends
Throughout the week, July corn futures on the Chicago exchange have been trading around $177 per ton (-2.2% for the month), and December futures around $184 per ton (-3.4%), supported by forecasts of hot weather this week, which could negatively impact crop conditions.
Brazilian Corn Harvest and Export
According to Conab, as of June 15, the first corn crop in Brazil has been harvested on 88.1% of the areas (compared to 87% last year), and the second corn crop has been harvested on 13.1% of the areas (compared to 5.3% last year). This will likely increase export supplies of corn in the coming months. It is also worth noting that S&P Global Commodity forecasts a sharp increase in corn use for bioethanol production in Brazil to 17 million tons, up from 13.26 million tons in the 2023/24 marketing year, which will slightly reduce export supplies from Brazil.
The drop in export demand for Ukrainian corn is notable, with prices falling and future prospects influenced by improved planting conditions and global market trends. The situation in Brazil and the US will continue to play a significant role in shaping the market dynamics.