Increased Demand and Rising Prices

During the past week, purchase prices for corn in the ports of Ukraine have seen a notable increase. The spike is driven by active demand from importers, a shortage of offers from producers, low transitional stocks, and the July heat, which has negatively impacted the formation of the harvest for late crops. Since Monday, demand prices for corn have surged by $13-17 per ton, reaching $170-181 per ton SRT-port.

Impact of Heat on Corn Crops

Vulnerability to High Temperatures

At the current stage of development, corn is particularly vulnerable to high temperatures, requiring maximum moisture during the flowering phase. In many areas, the reduction of productive moisture reserves to critical levels and heat stress has led to persistent wilting, cessation of growth, yellowing, and drying of leaves and stems. The heat has also sterilized the pollen, worsened pollination, and caused the formation of epicotyledons, ultimately reducing the expected yield of corn.

Recent Weather Relief

Rain in the past week has brought temperatures down to normal levels and slightly improved crop conditions. However, the southeast region of Ukraine remains severely affected. Lower corn harvest forecasts in Ukraine and the Russian Federation are supporting new crop prices, although growth is limited by low prices for fodder wheat and corn in Chicago.

Harvest Forecasts and Market Impacts

Ukraine's Corn Harvest

According to local agency forecasts, Ukraine is expected to harvest 24 million tons of corn this year, which is 21% less than last year's harvest. The State Customs Service reports that as of July 24, Ukraine has exported 1.39 million tons of corn in the 2024/25 marketing year, compared to 915,000 tons during the same period last year.

Russia's Corn Harvest

The Russian agency IKAR has lowered its corn harvest forecast for the Russian Federation by 3 million tons to 14 million tons (17 million tons last year) due to the heat in the Southern and Central Districts. SovEkon experts also reduced their forecast from 14.6 to 13.4 million tons.

Global Market Influence

Forward prices for corn deliveries to the Black Sea ports in September-November have risen by $10-15 per ton to $170-180 per ton, aligning with feed wheat prices. Despite the reduced harvest forecasts in the EU, Ukraine, and the Russian Federation, December corn futures in Chicago only rose by 1.5% to $164.5 per ton, due to favorable weather conditions in the US.

European and Brazilian Harvests

Agency MARS has reduced the forecast for corn yield in the EU from 7.55 to 7.24 tons per hectare, 2% lower than the 5-year average. In Paris, August corn futures rose by 3.9% during the week to €220.5 per ton or $239 per ton, which will support Black Sea corn prices. According to Conab data, Brazil has harvested 79.6% of its second corn crop as of July 21, compared to 47.9% last year, although rains are delaying the process.

Future Market Outlook

In the coming months, the global market will be dominated by corn from Argentina and Brazil. However, starting in September, the demand for Black Sea corn is expected to increase, leading to a rise in prices.

The combination of strong demand, adverse weather conditions, and reduced harvest forecasts has created a volatile market for corn. Stakeholders should prepare for potential price fluctuations and consider the impacts of global market dynamics on local pricing and availability. The situation underscores the importance of strategic planning and timely market responses to navigate the challenges ahead.