The Ukrainian corn market continues to maintain stable exports, but global factors may significantly affect pricing in the coming weeks. In particular, the drought in Argentina and delays in sowing in Brazil may become the key drivers of growth in demand for Ukrainian grain.

This was reported by the analysts of the First Ukrainian Agricultural Cooperative (FUAC), established within the UAC.

In January, Ukraine exported almost 2.5 mln tons of corn, and more than 2.15 mln tons have already been contracted for February. If the situation in Brazil continues to decline, it could create a new wave of purchases by European and North African importers.

“Argentina has been reducing its crop estimates for several weeks now due to the drought, and Brazil is having serious problems with the pace of the second crop sowing. If they fail to do everything in time, Ukraine will remain one of the main suppliers of corn to the global market in March-April” the FUAC said.

Currently, the conditional prices for corn on the Ukrainian market are in the range of 215-216 USD per ton CPT-port. If the problems in Brazil worsen and Argentina continues to cut its production forecast, the price levels could reach 225-230 USD per ton. This will bring corn closer to the price of feed wheat, which will put additional pressure on the market.

The biggest concern is the Mato Grosso State in Brazil, where due to prolonged rains farmers do not have time to harvest soybeans, which in turn delays the corn sowing.

“Last year at this time, they sowed 21% of the area, and now only 1%. The optimal time for the second crop sowing is 15-20 February. If farmers miss the deadline, yields may decline significantly” the FUAC experts explained.

It is expected that in the coming days there will be more precipitation in the region, which will slow down the sowing pace more. This factor may be crucial in shaping corn prices in February-March.

The analysts predict that the next week will be key to determining the further dynamics of the market. If Brazilian farmers fail sowing the fields in time, it could lead to a shortage of corn on the global market and cause the prices to rise rapidly.

“If the price of corn rises to 230 USD per ton, producers should consider fixing contracts. The market can either take off quickly or adjust sharply, so it is not worth delaying sales” the analysts said.

In general, Ukrainian corn remains competitive, and in case of unfavourable weather in South America, it may receive additional demand from European and Asian importers.