Corn prices in Ukraine seen pushing forward

Since early May, the Ukrainian export market (FOB) has been experiencing a gradual increase in corn prices. In May, grain prices rose by USD 7-8 per ton, in June — by USD 10-12 per ton, and in the first half of July — by USD 5 per ton on average, the APK-Inform consultancy reports.

This price trend is caused, first of all, by the lasting fears about the decrease in grain production in the US due to unfavourable weather conditions, as well as by the growing interest of Chinese importers in Ukrainian corn against the backdrop of the US-China ongoing trade conflict.

"In May and June 2017/18, Ukraine supplied to foreign markets approximately 3.2 million tons of corn, 434 thou. tons of which were supplied to the Chinese market, while in the same period of 2018/19 these indicators increased significantly and amounted to 6 million tons and 867 thou. tons, respectively," the report says.

A more active rise in prices for grain in Ukraine is curbed by the expected second-largest corn crop in Ukraine after last year's record, the forecast of record corn production in Latin America and an increase in Brazilian corn exports to China. Prices were also under pressure as weather conditions in the US corn belt had improved by the end of June 2019, which led to higher production forecasts for US cereals, as well as expected high carry-overs of US corn.

"While spot corn supply prices ranged from USD 168-174 per ton FOB in early May, as of July 16 they were mostly USD 190-198 per ton FOB, and in some cases for Panamax-type vessels, they reached USD 200 per ton FOB with mid-August delivery. An additional support to prices is currently provided by the growing demand for Ukrainian grain both on the spot and forward markets," analysts say.

Previously reported that by July 15th harvesting of early grain and leguminous crops in Ukraine was carried out on the area of 5.1 million hectares or 52%. The crop reached 17.4 million tons.