Ukraine's internal new crop corn prices on fire amid crop worries

Rising domestic prices for the new crop corn in Ukraine this week reflect concern about the possible negative impact of dry and hot weather on yields and overall output, trade sources have told Agricensus.

Exporters’ looking to cover shipments scheduled for September through to October loading are providing another supportive factor driving up prices in the region, despite the country still expecting to harvest a big corn crop.

"All have concerns that we will have much less corn than was expected earlier," a trader said.

"Traders are afraid that the situation with wheat will repeat for corn, when no volumes were available at the start of harvest, so they want to make themselves safe by trying to buy now," a second trader added.

The official prices that companies say they are willing to pay in ports for newly- harvested crop for October have risen by around $4/mt over the week to $160/mt.

But some deals were signed at around $162-164/mt for volumes of under 1,000 mt, and around $166/mt for larger volumes of regular corn, local traders reported, and prices have even jumped as high as $170/mt for corn with Chinese documents.

FOB costs are around $11/mt, meaning that trades on a CPT basis are done at the equivalent of current FOB prices or even higher.

Even so, it is reportedly a struggle to secure volumes because farmers have a strong bargaining position and are able to hold off in anticipation of securing even higher prices.

On a FOB basis, offers for November loading are around $176-178/mt, with bids at least $3/mt away from those levels.

Ukraine expects a bumper corn crop in the 2020/21 marketing year due to a record high planting area.

Still, the recent dry and hot weather has resulted this week in downgrades to previous record estimates of the size of the crop to 35 million mt, slightly below last year's result, according to ministry data.