EU feed corn buyers secure June, July supplies amid anticipated supply shortage

Feed corn buyers in the EU are proactively securing their June and July requirements, anticipating a supply shortage due to limited availability from major producers. Market participants have noted that corn supplies from Ukraine are expected to slow down as existing stocks are depleted, while corn from South America will not yet be available.

An importer from Spain said, "June and July will be very technical, as Ukraine won't have a lot of stocks, and shipments from Brazil won't arrive until mid-August."

Another importer based in Barcelona added, "Feed mills are now covering their needs for June and July." However, they noted that during this time, Spain's domestic crops of wheat and barley would be available, allowing feed mills to substitute corn in their feed formulations with these grains to meet nutritional requirements.

Market participants are optimistic about Spain's domestic barley crop this year, which is expected to alleviate some supply pressures. This contrasts with last year, when a poor local crop forced Spain to import barley to satisfy its feed needs, a situation considered unusual, according to a third source.

Buyers in Spain anticipate that corn prices will rise between June and August, attributing this trend to market dynamics. A buyer from a feed mill in Valencia said, "We might see corn priced at wheat plus Eur10 at some point during June-August." The buyer added, "This creates strong incentives to ration supplies as much as possible and operate with minimal inventory."

In Italy, feed corn buyers are also reporting that prices in the EXW market will be higher from June to September compared to two- or three-month forward purchases, due to limited supply expected from Ukraine during this timeframe. A buyer from a feed mill in Italy stated, "I'm trying to purchase for July-September to safeguard against supply shortages," noting that prices for this period are significantly higher.

The small corn crop from the Black Sea this year, impacted by heat wave conditions, has resulted in limited supply from the region. Ukraine's production for the 2024-25 season has been revised down by 23% compared to the previous year, while quality concerns have restricted Romania's supply to the EU.

Additionally, the recent import tariff on US corn is expected to limit sourcing options once it takes effect. Nevertheless, sources in Spain indicated that some US corn is still en route, with ships arriving in Barcelona and Tarragona. A market participant from Spain reported, "A few ships of US corn have arrived," while another importer confirmed, "There are still some ships coming in." Market participants believe these supplies could help cover needs for June and July, with three to four-month forward purchases being made, as the US remains the most cost-effective source currently available in the Spanish market.

As of March 21, Platts assessed Ukraine corn FOB POC at $240/mt for loading between April 18 and May 2.