23 de agosto 2019 | Na Mídia
Brazil’s corn trade is eyeing the growing competitiveness of Ukraine’s 2019/20 corn crop as the country’s exports face being squeezed out by lower-priced Black Sea supply.
“Now that Brazil is not so competitive and Ukraine is coming with a massive crop, the dispute will be fierce,” one market source said, with Brazil already locked in a contest for market share with neighbouring Argentina.
Ukraine is expected to grow another huge crop in 2019/20, after delivering its biggest ever corn crop in 2018/19, with an increased area leading some agencies – including the USDA – to lift their estimates to a new record.
Brazil is expected to land a huge corn harvest itself, with up to 101 million mt split between the first and second harvests.
For Ukraine, having grown around 35 million mt in 2018/19, the USDA is forecasting a 36.5 million mt crop already, with harvesting just about to begin.
And Brazil has already seen an extensive export programme, which is providing some support for Brazil’s FOB premiums at a time that Ukraine’s harvest is likely to start hitting the bins.
“Our FOB price does not have much scope to turn cheaper soon, due to a giant export commitment, which has already surpassed 20 million mt,” the source said.
“In normal years, Brazilian corn exports decline in the last quarter of the year,” Agrural’s Daniele Siqueira said.
“This year we exported a lot of corn in July and we are likely to ship a lot of corn in August too – maybe more than in July. Are traders thinking that we will run out of corn to export in the last quarter? Maybe,” Siqueira said.
Through October and November, when the two countries will be in direct competition, Ukraine’s FOB handysize market is already offered at around 38 cents over the December contract, with November loading panamax cargoes offered at 43 cents over.
By comparison, Brazil’s FOB Santos market was heard offered at 35 cents over and 40 cents over December for October and November loading respectively, late Monday.
“We’ll have a lot of corn, but maybe farmers will sit on that corn waiting for higher prices,” she said.