KIEV: Prices for FOB Ukraine corn prices have powered past feed wheat and some grades of milling wheat to reach parity with 12.5% protein wheat, trading sources in the Black Sea said Monday.
The move could be an indicator that corn prices in the region are approaching their ceiling, after a run up globally that has seen the corn complex strengthen on the back of the good demand and unfavourable weather.
With an unconfirmed corn trade, potentially destined for China, for an April loading handymax-sized vessel in a panamax port heard done at $208/mt on Friday, corn prices are now on par with 12.5% Russian wheat, which was heard bid for the second half May loading at the same price Monday.
The Kingdom has soaked up $1 billion worth of barley via import tenders, eschewing alternate, cheaper feeds in favour of its regular, established demand.
Barley competes with wheat and corn as an animal feed.
Firmer corn prices in the Black Sea region have been driven by a mixture of “fear and fundamentals” according to the first source, as farmers have held on to supply in the belief that prices are set to move higher as fears mount over Argentina’s corn crop.
With China still picking up corn cargoes from Ukraine, the EU’s decision to cut all import duties for grain imports may also be providing a second tier of buying interest.
“I think more Ukraine origin imports are possible,” a Ukraine-based source said, with the EU already taking something in the region of 8.1 million mt of Ukrainian corn imports in January to November 2017, according to data from the European Union’s statistical arm.