Ukrainian new crop corn rallies as EU feed grain fears bite

Prices for Ukrainian new crop corn is rallying as farmers concerned over the price of animal feed grains make forward purchases, switching from feed wheat.
A Panamax port FOB Handysize parcel for February-loading traded in first week of August at $202.90/MT (120 cents/bushel over the Chicago March futures contract), up $8 on the week from the previous trade.
“Big wheat consumers are in the market for anything cheaper than barley and wheat,” a source said.Many of the forward buyers are in Europe where wheat prices have exploded due to prolonged serious dry and hot weather.
Feeding livestock has become tricky over the last months due to a lack of suitable grass for grazing, forcing many farmers to delve into their winter feed wheat stocks.
“Feed mills in Germany are worried because of the wheat situation there is a worry about a shortage of EU feed grains,” a source said.
Feed wheat prices for FOB Bulgarian or Romanian originations loading in October were heard at $222/MTin first week of August compared with $203/MT a month ago.To minimize cost inputs, feed millers are switching to corn, which is much cheaper and can be purchased from origins cheaper than the EU, without additional tariffs such as the Ukraine.
October-loading FOB Ukrainian corn was priced at $195.50/MTon 2nd October, according to sources, making it over $20/MT cheaper for consumers.
The situation is not simply limited to Ukrainian new crop trading. Inquiries for Handysize old crop parcels are also beginning to rise.
“Destination buyers are returning to the market [again] for old crop corn. We’ve seen some demand from the East Mediterranean. But there is little quality left,” a source said. Prompt-loading Ukrainian corn sits close to a seven-week high at $185.75/MT, tracking higher wheat prices.With little good quality corn left, and firmness in the wheat markets, old crop Ukrainian corn prices could jump higher to value around $190/MT in the short term, sources said.
Source: spglobal