Ukraine corn prices plunge as China interest turns to alternatives

Ukraine’s corn prices have fallen close to $10/mt in the space of a week as buying, and particularly China demand, slows, market sources told Agricensus Thursday.

“[China] has heavily bought some new crop barley and they have reduced or cancelled a few corn contracts,” one market source said, citing the relative strength of Ukraine’s corn market versus other origins as a potential reason for scaling back buying.

“Argentine corn for April is around 90 cents [over the May futures contract] or $182-183/mt FOB, while Black Sea corn is over $200/mt FOB; it makes no sense,” the source said.

Agricensus assessed the spot price of Argentina FOB Up River corn at $184.50/mt Wednesday, versus Ukraine at $198.75/mt – basis handysize vessels, with much of the Ukraine exports focussed on the larger panamax sized vessels which tend to command a $2/mt premium.

That compares with $206/mt on March 14, with bids and offers heard around $197/mt today for April loading, according to market sources.

“Prices have really dropped around $10/mt. I’m not sure about China, but traders are saying that is zero demand,” a second source said.

While Argentina had been cited as a reason for China demand slowing, quality issues mean that the country cannot easily export corn to China.

“Argentina signed a protocol which is too strict, so exporters are not willing to meet Chinese requirements… China probably will buy more local corn,” a source in Argentina said.

Barley worth it

China is also said to have picked up barley volumes in recent days, buying optional origin barley potentially from Ukraine or France. 

The buying covered up to 3 panamax cargoes of old crop barley, and up to 9 cargoes of new crop - some three quarters of a million mt, according to the first source. 

Barley competes with corn as an animal feed.