Early and Late Crop Yields Affected
The Ministry of Agricultural Policy of Ukraine has projected that the average yield of early crops will decrease by only 5%. However, the yield of late crops, including soybeans and corn, is expected to drop by 15% due to abnormal heat in most regions.
Weather Conditions and Soil Moisture
Although temperatures in Ukraine have recently returned to normal, precipitation remains uneven, leaving soil moisture reserves low in many areas. This lack of moisture is causing plants to dry out and deteriorating the condition of soybean and corn crops.
Corn Prices and Export Trends
During the past week, purchase prices for new harvest corn with delivery to the port in October-November increased by $3-5 per ton, reaching $180-185 per ton SRT. This price level is slightly higher than last year’s and is supported by rising export prices for fodder wheat, which have reached $180 per ton SRT-port due to a shortage of offers from farmers.
According to the State Customs Service, as of July 29, Ukraine has exported 1.47 million tons of corn in the 2024/25 marketing year, compared to 1.1 million tons during the same period last year.
Global Corn Market Influences
In Chicago, December corn futures fell by 0.7% for the week to $162.3 per ton, influenced by favorable weather and active exports from the US. According to USDA data, as of July 28, 30% of US corn crops were in the test stage, 8% higher than the five-year average. The number of corn crops in good or excellent condition increased by 1% to 68%, up from 55% last year.
US corn exports for the fiscal year 2023/24 have reached 46.66 million tons, 34% ahead of the previous year’s pace. By the end of the season on August 31, exports are expected to significantly exceed the USDA forecast of 47.7 million tons.
Competitive Pressure from Brazil
According to AgRural, as of July 28, Brazil had harvested corn from 91% of the second crop area, compared to 55% last year. This rapid harvest allows Brazil to increase exports and strengthens its competitive position in the global market.
European Market Trends
On the Paris exchange, August corn futures fell by 1.8% to €217.25 per ton, while November futures dropped by 4.3% to €208 per ton ($192.1 per ton), 14% lower than last year’s level.
Implications for Black Sea Corn Prices
These factors will likely increase pressure on Black Sea corn prices in the near future, as the market contends with fluctuating global dynamics and competitive pressures.
Comment
The agricultural sector in Ukraine faces significant challenges due to extreme weather conditions and fluctuating market dynamics. While early crop yields show a modest decline, the substantial drop in late crop yields underscores the vulnerability of agriculture to climate variability. The increase in global competition, particularly from Brazil, adds another layer of complexity to the market. As Ukraine navigates these challenges, stakeholders must strategize to mitigate impacts and explore opportunities in an increasingly competitive global market.
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