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Ukraine and Brazil new factors in corn price discovery

An economist at USDA says the United States has new competition for setting the global price of corn.

Carlos Arnade works in the Department’s Agriculture Economic Research Service and co-authored a report suggesting Ukraine and Brazil have emerged as major players in the price discovery of corn.

“We think farmers should at least pay attention to what’s going on in Ukraine and Brazil.  I think they traditionally pay attention to what’s going on in Argentina, but we find these two new emerging markets whose shares have grown significantly in the last decade.”

Even with the emergence of Ukraine and Brazil, the U.S. remains the largest influencer for corn, based on what Arnade calls a price discovery weight of 55 percent.

“This shows that the United States still dominates.  Argentina is 32 percent, so Argentina is still important.  But Brazil (at) 8.8 percent…they weren’t even on the radar ten years ago.  They didn’t even export corn.  And Ukraine is at 3.2 percent (on) average.”

Arnade says a lot of information goes into setting the global price of corn, including the value of currency, government crop production data and weather.