Corn market overheats: prices break records, external demand weakens

Ukrainian corn prices have peaked, surpassing food wheat, but domestic and foreign demand is starting to decline.

Ukrainian corn prices have exceeded $240/t in Black Sea ports, which is $15-16/t more than for feed wheat. This was reported by the Electronic Grain Exchange of Ukraine.

However, signs of “overheating” are already being recorded on the market: traders are cautiously assessing purchases, and some international companies have stopped purchasing, unable to resell the grain at a competitive price.

Large consignments of corn, or those shipped with a short delivery time, cost traders up to $243/t, while second-class food wheat is offered for no more than $237/t, and for feed wheat — $228/t.

Additional pressure on prices is created by the end of Turkey’s import quota, analysts at ASAP Agri note. Of the allowed 1 million tons of duty-free corn imports, only 12,000 tons remained as of April 28, two months before the end of the concession period. Turkey has been a key driver of demand in recent weeks, so a decrease in its activity would potentially weaken price support.

The price increase was also fueled by limited supply. Due to the cold spring and moisture deficit, as of April 24, only 18% of the planned area — 705 thousand hectares — had been sown with corn in Ukraine (for comparison: last year at this time — 30%).

Domestically, agro-processors are also reducing corn purchases, preferring much cheaper feed wheat. Export figures also indicate a decline in activity: from April 1 to 28, only 1.37 million tons of corn were shipped from Ukraine — almost three times less than the volumes of the same period last year.

Global futures are also seeing a decline in futures. In Chicago, July corn futures fell to $190.3/t, and December futures to $177.3/t. In Paris, June futures fell to €201.25/t, or $229/t.

At the same time, international conditions hint at a possible market reversal. Argentina is accelerating corn harvesting, which will soon increase global supply, and the US has already completed 24% of its planting, which is above the five-year average. China, meanwhile, has reduced its interest in American products, which is creating additional volatility in the market.

As USM previously reported, Turkey was actively increasing imports of Ukrainian corn before the introduction of the new quota.