Ukrainian corn enjoys highest prices after French origins — ASAP Agri
Over the last 10 days, Ukrainian corn prices on CPT POC (Pivdenny/Odesa/Chornomorsk) basis have retreated from 210 USD/MT to around 200 USD/MT as of Tuesday, 22 October. In this context, a question has emerged: “Towards which price levels can Ukrainian corn prices fall?” ponders Olivier Bouillet, Head of Analytics & Insights at ASAP Agri.
First of all, it should be highlighted that Ukrainian corn prices have grown in a spectacular way if compared with CBOT. Indeed, since 1 September 2024, prices have strengthened by +25 USD from 175 to the current 200 USD/MT, when December delivery for CBOT corn only recorded 8 c/bu or 2 USD/MT, the analyst says.
This recent movement in the Ukrainian market has been boosted by some good reasons:
- reduction of corn output in the closest neighbours, competitors in the export arena such as russia, Serbia, Bulgaria and Romania;
- issues regarding quality in central and western Europe;
- retention by Ukrainian producers in September.
"As a result of recent evolution, Ukrainian origin is now displayed as one of the most expensive around the world just behind the French origin. Compared to the US, Argentina or Brazil, the Ukrainian origin is more expensive by 12 to 15 USD. At some point, Ukraine will face issues linked to a lack of competitiveness. Many Ukrainian operators are waiting for demand from China, that may not come. Indeed, corn imports by China may be divided by 2 this year compared to the last one, if relying on market echoes."
Therefore, the EU will remain a crucial destination for Ukraine (target 11+ MMT), Egypt (2.5+ MMT), Turkey (2+ MMT) and Asia (1+MMT). There are then other destinations than China to be monitored, especially against Brazil which is starting its exporting season for corn.
For November deliveries, the US origin is the most affordable for a number of destinations. On a CIF basis, the US origin is cheaper than UA origins by 7/8 USD towards Turkey, by 12+ USD towards Egypt and by 15+ USD towards Spain. Therefore, to conquer market share, Ukrainian corn should pursue its actual consolidation. The level of 190 USD/MT on CPT may then be reached quite soon, Olivier Bouillet suggests.