Corn: Pressure on prices cuts short the pecuniary gain from the higher output

September 30, 2017 at 2:26 PM , Starry Night Ltd.
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SOFIA. The dialog between producers and buyers weighs in favor of the latter. A price hike is beyond real; a bearish trend is quite certain.

BULGARIA. The certainty of the much stronger projected output this year leaves no one in doubt of corn availability on the local market. Right now, some farmers have assumed a cautious attitude of what the market have in store for them in the medium-term and not wanting to risk even lower price levels, they sell. The country is in the midst of harvest.  

Corn: Following a downward price trend

According to the Ministry of Agriculture, by the 21st of the month, farmers managed to combined 40% of the 419,492 ha available for harvest this year. Final estimates of collected production reached 953,524 mt. Last year’s output stood at 2,226,094 mt.

So far during harvest, corn prices have been unfailingly sliding on a downward trajectory. For instance, at the end of last season – August 2017, prices of corn withstood regional market pressure and nailed local demand at as high as 0.148 EUR/kg EXW Bulgaria. Currently, prices have fallen to 0.134 EXW/kg Bulgaria, as most probably prices will slide further down by the end of harvest.

Harvest 2017-18

(01.09.2017 - 22.09.2017)

Carry over

480,000 mt

Domestic output

953,492 mt

Domestic consumption

78,000 mt

Exports to the world

94,958 mt

Source: Bulgarian Ministry of Agriculture

Presently, the price spread between feed wheat and corn is only a few euro in favor of the latter. Export of wheat have been climbing on a weekly basis, keeping prices low enough to be competitive on foreign markets. However, the dynamics on the wheat market – domestic and foreign – seem to have failed so far in the season to lead to a correction in the price of corn.

Corn, Bulgaria

Crop

EUR/kg

Corn

0.134

EXW Bulgaria

 

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