Ukraine Expects Seasonal Drop In Corn Prices - Market Market: Has the Seasonal Rally Started?

Ukraine Expects Seasonal Drop In Corn Prices

Mintec Global
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In Ukraine, harvesting of the new crop of corn has begun. The forecasted harvest may be 30 million tons, which is quite a lot for local logistics. As of now, the corn harvest promises to be large. If the weather does not spoil anything, then Ukraine will have ~30 million tons in October-November. This is too much for Ukrainian logistics and a seasonal drop in corn prices in Ukraine is visible. The seaports are not working at all. The Danube ports are not working at 100% as well. It does not look very positive. According to rumors, only 2.3-2.5 million tons of corn have been contracted for export for September-December.

In recent days, the Romanian port of Constanta showed an increase in liquidity. Producers set prices for corn for October-November. Currently, the prices of $200-205/t are quite attractive. The current price and the cost of logistics, on average, allow farmers to generate a profit.

Analytics noted that in order to function normally, it is necessary to export 1.8-2.0 million tons of corn every month. However, the question is whether Ukraine can do it.

Shelling of ports

One of the unforeseen factor is the shelling of the Danube ports. It is, unfortunately, not realistic to somehow guess it. If shelling continues, then exports via the Danube will be weak, and freight will also increase in price. In a few weeks, under the increase of supply, the price will objectively creep down. Last season, this happened more than once.

Also, weather can make certain adjustments. Because rains during the harvest period will slow down the harvest and affect the moisture content of the grain, thereby increasing the cost of cultivation.

Accordingly, for now, a seasonal decrease in prices is visible on the market. Due to significant distortions in the supply, there is a huge imbalance in the market. Thus, it is necessary for farmers to wait for clarity.

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