London — Demand for Ukrainian corn is returning to the market amid short covering for November-loading positions, elevating its price to a two-week high.
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Several Panamax port FOB Handysize trades were heard done Wednesday at 62 to 64 cents/bu over the Chicago December contract futures, roughly $170/mt for loading in H2 November in particular.
The increase in trading has taken Ukrainian kernels to a two-week high, rising $4.25 over the fortnight to $169.75/mt as assessed by S&P Global Platts Wednesday.
The price increase comes amid a firmer Chicago futures contract amid high strong export data from the US.
For example, the US Department of Agriculture showed Tuesday that the US exported 230,000 mt of corn to Japan in a single day.
Additionally, an air of greater trading predictability has helped markets.
The US, Mexico and Canada reaching an agreement to revamp the current North American free trade agreement is tantamount to this.
Nonetheless, Ukrainian corn still faces a number of hurdles such as exporting programs developing slowly amid global competition and well-stocked destinations.
Despite the US' firm export program, a bumper harvest in the US is expected. Similarly, the USDA's most recent stocks update showed a higher-than-expected volume. These factors will limit any significant price upside.
Moreover, big buyers such as Egypt are well stocked at the moment after large purchases earlier in the year.
Slow internal consumption amid a lack of storage has made this heavy on price, leaving any domestic sales to trade well below replacement.
These factors are further exacerbated by the fact that Ukraine is expecting one of its biggest harvests on record: 31 million mt, according to the USDA, or 33 million mt, according to the market.
Ultimately, given sluggish demand and a big belt of forecast supply, Ukrainian corn prices are likely to encounter a ceiling, at least on a basis level, as the marketing year progresses.
However, a strong export program to the EU -- Ukraine's export pace is now higher year on year -- has helped its corn exports rise 24% on the year, according to latest Ukrainian government data, after the extreme summery weather drove a number of trades in July and August for October-loading.
--James Colquhoun, email@example.com
--Edited by Jonathan Fox, firstname.lastname@example.org