Corn can once again become the main export agricultural product of Ukraine

The positions of corn on the market of the agro-industrial complex are gradually strengthening.

Corn prices are rapidly approaching the level of feed wheat on an FOB basis, returning corn to the role of a key commodity in the grain sector. This is written by Latifundist with reference to ASAP Agri analysts.

According to the UGA forecast, the corn harvest in Ukraine in 2024 will decrease by 21% compared to the previous year — from 29.6 million tons to 23.4 million tons. Accordingly, the export of corn will also decrease by almost 30% — from 26 million tons to 18.5 million tons.

During the second half of the growing season, corn prices showed steady growth, outpacing other grains. If in mid-June Ukrainian corn was $20 cheaper than fodder wheat, today the prices have almost equaled. The 11.5% protein wheat premium over corn is now $10, holding back the fall in the domestic food wheat price.

“This new market fact can be positive for Ukrainian manufacturers. First, in the global market, corn prices in Chicago have just recovered, rising above the psychological level of $4/bush, which should now be a strong support for the market. In the short term, we expect a cut in US corn yield estimates, which could support the market. This may happen after the WASDE monthly report is released,” ASAP Agri said in a statement.

Analysts also emphasize that the grain sector receives support from oil crops. This is confirmed by the high ratio of soybeans/corn on Chicago Stock Exchange and canola/wheat on Euronext. In addition, the drought in Brazil, which prevents the sowing of soybeans, continues to support oil prices.

At the same time, currently the only drawback of Ukrainian corn is that it is expensive compared to the market benchmark — Chicago. Yes, now the Ukrainian CPT is trading $20 above the December contract. A similar situation was observed before the full-scale invasion. The current $20 premium is due to expectations of increased buyer demand and farmers’ reluctance to sell grain.

The day before, USM wrote that since the beginning of the new season, Ukrainian agricultural producers exported more than 8 million tons of grain.