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Corn: Will prices prevail through current levels?

November 17, 2017 at 8:42 AM , Starry Night Ltd.
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SOFIA. The expected higher availability this season seems to be the anchor of price hikes. Will the dynamics of the feed wheat market kick in to turn the wind in favor of local corn market sellers?

BULGARIA. By the 9th of November 2017, according to local authorities, estimates of farmers’ combined acreages came to 93.8% of total available land for harvest during this season, which stands at 418,136 ha. Estimates of collected corn reached 2,282,398 mt, with an average yield of 5.8 mt/ha or by 10.4% higher than the yield from harvest 2016-17.

      Harvest 2017-18

(01.07.2017 - 10.11.2017)

           units in MT

Beginning availability

580,000

Aggregate output

2,282,398

Imports

164

Domestic consumption

255,000

   food & industrial usage

90,000

   feed

165,000

Exports to the world

483,645

   to EU markets

  387,864

   to rest of the world

    95,781

Source: Bulgarian Ministry of Agriculture

Favorable weather conditions throughout the year, maintaining the moisture reserves in the soil till right before harvest, were responsible for the stronger yield this season. Exactly the higher yield is behind the projected increase in the country’s output, as the market expects total production to reach between 2,5 – 2,6 mmt.

Corn: will prices prevail through current levels?

Since the carry-over was higher – 580,000 mt and farmers started selling while in the midst of harvest, fearing a further nosedive down the road, prices started as low as 0.125 EUR/kg EXW. Prices have increased since then, but recently seem to have stopped their modest advance, even more since the country expects a stronger output.

Drastic upward swings seem a long shot, at least in the short-term, but since domestic consumption of corn for feed is, to a substantial extent, influenced by the dynamics of the wheat export markets, and while the difference between the price levels of corn and feed wheat is small, internal demand for corn is projected to keep the momentum strong; besides, exports of wheat are expected to keep the impetus longer into the marketing season.

Corn, Bulgaria

Crop

EUR/kg

Corn

0.136

EXW Bulgaria

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