Ukraine dominates attentions of corn buyers for Q1 2020

8 Nov 2019 | Masha Belikova

Just two months into a season that could yet deliver a consecutive record corn crop, there are signs that demand for Ukraine's exports is finally awakening.

"There is demand coming, and most buyers are still open for the first quarter. November demand is sluggish for Black Sea corn, but it will improve mid-December and into the first quarter," one trader told Agricensus.

Digesting one record harvest in 2018/19, Ukraine is facing a race to secure market share as it lands a second huge harvest in 2019/20.

Meanwhile, firmer prices across North and South America are poised to deliver perfectly-timed sales opportunities, market sources said. 

"Regarding EU demand, there's nothing concrete, but Germany should take some cargoes for January/February soon, while for November and December, demand is pretty much all covered both in Germany and Spain," a broker added.

Another source also said that the current prices would allow Italy's buyers to book big vessels at almost the same level as the smaller coaster-sized parcels.  

Since the start of the season, the corn market has shown few signs of activity, with enough of the old crop remaining in warehouses to keep export programmes ticking over. 

Traders were largely covering their old positions rather than taking on new deals while Ukraine looked uncompetitive versus South America's powerhouses, with both Argentina and Brazil also harvesting huge crops this season.

Both South American origins have dominated export markets for much of 2019, but over the last two weeks a revival has been detected for the Black Sea rival. 

More trades have been heard in the market, including deals to EU countries, China, Egypt and Asian destinations.

This week South Korea booked up to 400,000 mt of corn for shipment in the second half of December to February shipment.

Sources expect most of that to be sourced from Black Sea, while there are signs that Ukraine is starting to edge out Brazil's position in EU imports.

"It is hard to figure out as most suppliers offer worldwide optional origin, but I also feel that most of them are targeting cargo execution from Ukraine," an Asia-based trader said, regarding South Korea's buying.

Data from the European Commission also shows an increase in Ukrainian corn imports, with 304,000 mt imported last week, up from a weekly average of 100,000 mt over the last 17 weeks.

Total EU corn imports from Ukraine have now reached 2 million mt, 11% up year-on-year.

According to line-up data, around 482,450 mt of corn has been nominated for November loading to EU destinations, including the Netherlands, Spain and Italy.

In addition, exports to China between September and November have already outpaced the volume seen in the entire corresponding period of 2018, with the bulk of November still to be settled.