Black Sea Corn Market Update - January 30, 2025

Key Highlights

• Black Sea corn prices surge to a nearly two-year high as farmers hold back stocks.
• FOB Ukraine corn prices rise to $225/mt, reflecting a tightening supply.
• Competition in key destination markets remains strong, with Ukraine maintaining an edge over other origins.
• Feed wheat becomes cheaper than corn, shifting demand dynamics in European feed markets.
• Projected lower Ukrainian corn output in 2024/25 due to drought, adding further bullish sentiment.
• Ukraine introduces minimum export price measures, potentially affecting future pricing and trade flows.

Market Analysis

Corn prices from the Black Sea region continue to rally, reaching their highest levels since March 2023. As of January 29, 2025, Ukrainian FOB POC corn at $225/mt, up from $223/mt the previous week and significantly higher than the $173/mt recorded a year ago. The purchasing price for corn delivered to Ukrainian Black Sea ports has also climbed to $213/mt in the third week of January, with Carriage Paid To (CPT) values rising steadily since the start of the marketing season in October.The sharp price increase is largely driven by farmers holding back stocks, expecting further price appreciation. 

Ukrainian traders report that daily CPT sales are limited to just 50,000 mt, reflecting reluctance among growers to release inventories. "Farmers are not selling," a Kyiv-based trader noted, adding that cash flow needs ahead of the upcoming planting season will ultimately dictate sales behavior.Despite rising prices, Ukraine remains highly competitive in key destination markets such as Northwest Europe, Egypt, Turkey, and Spain. 

A Dutch buyer commented that "Ukraine is still the cheapest origin, along with France." 

Egyptian traders reported that 48.4% of their corn imports in the first half of January came from Brazil, with the remainder sourced from Ukraine.

Shifting Demand in Feed Markets:

A notable shift is occurring in European feed markets as feed wheat becomes a more attractive alternative to corn. With corn prices soaring, feed mills in Spain and the Netherlands have increased their wheat usage. 

The price spread between feed wheat and corn has narrowed to just €2-3/mt in the Mediterranean region, prompting a substitution trend. 

As of January 29, FOB POC feed wheat was offered at $231/mt for February shipments, while Ukrainian corn was offered at $228/mt for the same period. 

On a CIF basis, feed wheat offers for CIF Spainmed for March stood at $250/mt, while CIF Spainmed for Ukrainian corn was at $248/mt.

Outlook & Risk Factors

Looking ahead, Ukraine’s corn market faces multiple supply-side constraints that could add further bullish pressure on prices:

1. Lower Ukrainian Corn Production in 2024/25: Ukraine’s corn output is projected to fall to 25 MMT, the lowest since 2017, due to severe drought conditions. This will likely curb export volumes and sustain upward price pressure.
2. New Minimum Export Price System: Ukraine has recently approved a system to set minimum export prices for key grains and oilseeds, aimed at preventing undervaluation and tax evasion. This could impact trade flows and price competitiveness, particularly in comparison to Brazilian and Argentine corn.

GrainFuel Nexus  Conclusion:

• The Black Sea corn market remains bullish, with tight farmer selling and export competitiveness supporting elevated prices.
• Substitution trends in feed markets could dampen demand for corn, limiting upside potential despite strong fundamentals.
• Key risks include supply disruptions, regulatory interventions, and global macroeconomic factors influencing broader grain trade flows.

GrainFuel Nexus continues to monitor global grain market movements and will provide further insights as the situation evolves. For tailored market intelligence and strategic consultation, contact our advisory team today.

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