Ukraine’s bumper corn crop to pressure U.S. exports business

Ukraine is expected to harvest a record-high corn crop this year which threatens the US exports to Asia

A week ago, Ukraine, the largest corn exporter in the Old World, started to harvest the new crop. Starting average yield is high, 95 bu/ace (6 mt/ha) which is 8% above the previous year. Around 3% of the area has been harvested as of the beginning of the current week, so yield figures will change, but there are good chances that the country’s crop is likely to be record-high.

We estimate the new crop at 1.4 bln bu (36.3 MMT, USDA: 36 MMT), 1% above the 2018 record. The weather conditions were generally favorable for the new crop until late August when dryness somewhat damaged the yield potential of late-planted corn.

The good Ukrainian corn crop is bad news for other corn producers, including US farmers. With low domestic consumption and no ethanol industry to absorb the excessive supply big crops in the country convert into big exports. Typically Ukraine ships abroad 70-80% of a corn crop. This season the country is expected to export 1.16 bln bu (29.5 MMT; USDA 30 MMT) of corn, which is close to the previous season’s record.

At the same time EU, the largest market for Ukraine, is expected to significantly cut corn imports this year, by 13% to 0.8 bln bu (21 MMT), thanks to the good wheat crop, part of which will go to feeding. For Ukraine, this may be partly offset by larger Chinese imports which are forecasted by USDA to rise from 182 mln bu (5 MMT) to 255 mln bu (7 MMT) on a lower domestic supply. China is another top destination for Ukraine.

However, even with bigger Chinese shipments Ukraine is still could have an extra exportable surplus that needs to find a market. Those markets are likely to be found also in Asia, including such important buyers of US corn as South Korea (USDA: 0.4 bln bu; 10.5 MMT annual imports) and Japan, the largest world corn importer expected to buy 0.6 bln bu (15.6 MMT) this season. Japan is #2 destination for US corn and South Korea is #4. Ukraine used to supply corn to those countries in the past, but in limited volumes, this season it could try to enter those markets again.

Despite the projected decrease in exports from South America competitive environment for US corn in Asia could be tough again thanks to ample supply from Ukraine.

The piece has been originally written for Agriculture.com

Follow the Black Sea grain market

Get your free trial of The Sizov Report — an analytical service covering agricultural markets of Russia, Ukraine and Kazakhstan

Try for free

More Articles for You

Weekly round-up of Black Sea grain market – May 23

Russian wheat exports to tumble to 0.8 mmt in May, Ukraine is seeding corn fast despite the war

Weekly round-up of Black Sea grain market – May 16

Russian wheat exports to halve in May, no signs of de-escalation

Weekly round-up of Black Sea grain market – May 9

The weekly review of key Black Sea wheat and corn events

SovEcon ups Russian wheat crop forecast; Russia and Ukraine could export 60+ mmt of wheat in 2022/23

Russia could harvest 87 mmt of wheat in 2022; Russia + Ukraine 2022/23 wheat exports to reach 60+ mmt

SovEcon: 2022/23 Russian wheat crop and exports could be record-high

Excellent weather conditions and good inputs availability could lead to a record-high Russian wheat crop

Ukrainian 2022 grain crop to decline substantially

New Ukrainian wheat crop could decline by 19%, corn – by 34%, says SovEcon