The current situation with prices on the grain market, which threatens profitability of grain growing, cannot fail to excite. However, until the moment that grain of the new yield failed to reach the level of active sale, there are no grounds to estimate the situation as catastrophic. So, internal prices for wheat and barley will start growing in early autumn.

ProAgro experts expressed this opinion, Ukrinform reports.

Internal prices for wheat and barley will start growing at the beginning of autumn, when active purchases will start on the part of consumers and exporters. Naturally, things are different with corn: growth of prices will start in December-February, but by that time only corn of the old yield will be on the market, and the one is late, who has not succeeded to realize it, the analysts note.

Therefore, the experts believe, still there is no tragedy in the current low prices for the new yield. There cannot be a unified opinion about an optimal price. Even, when some processors paid UAH 2,400/ton for 2 class wheat in April-May, agricultural producers though this is a very small price, taking into consideration the storage expenses. A price should cover expenses and ensure reasonable profitability. According to logics of those, who more than others suffer because of low prices today, a price should not only fulfill those tasks, but it should grow increasingly, the experts sum up.

As it is known, they note, domestic grain prices in Ukraine are derived from world market prices, and the world grain prices in the new season will undoubtedly be lower than last year.

There is certain probability that the state of sowings will worsen in the U.S. At the same time, a possible blow on the yield will not change the fact that the gross yield of corn in the U.S. next season will exceed the yield of the current season.

As a result, recently, a rapid fall of world corn prices is observed. Only now, corn prices at world exchanges fell lower than the last year minimum, which fell on June 2012. As of the end of July 19 this year, corn in September futures at Chicago was traded at USD 199/ton ex-silo. On the other hand, this is 1.5 fold up against July 2010.

Market participants should put up with the fact that the world grain market in the new season will be loose, the whole number of key producing countries have proposals in view of generous yields, and grain prices will go down. For the first few years, the grain market can access the confident long-term bear trend, and producers need to adapt to conditions that have formed, the experts sum up.

As reported, Agricultural Policy and Food Minister Mykola Prysiazhniuk stressed that the state controls the price situation on the domestic grain market, forward contracts were concluded for considerable volumes of grain by the Agrarian Fund and the State Food and Grain Corporation. Local authorities in cooperation with the branch ministry form regional stocks of cereal grain.

To remind, according to the Agricultural Policy and Food Ministry, prices for 3 class wheat now make up, depending on the region, UAH 1,400-1,600/ton, 6 class fodder wheat - UAH 1,400-1,600/ton, barley - UAH 1,420-1600/ton.

Ukrinform