The 2018 harvest has been impressive in Ukraine, reaching a record at 35.5 Mt against 24 Mt last year and 26.95 Mt in average for the last five years. Indeed, Ukraine had a lot of rain in the main regions of production during summer, which hampered the wheat quality during the harvest but favored the development of summer crops as corn.

The export potential is very high, estimated at 28 Mt by the USDA, which means Ukraine will be the 3rd exporter of corn in the world this year, after the United States and Brazil.

Graph showing corn exports from Ukraine by destination, KMT.

The first client for corn in Ukraine is the European Union, especially Spain which bought already 1.75 Mt of corn from Ukraine between October and December 2018. The Netherlands are second buyers with 1.4 Mt followed by Germany (due to drought this year) with 0.7 Mt and Italy with 0.59 Mt. The other main buyer this year is China, which bought 824 000 tons of Ukrainian corn.

Graph showing corn prices in Ukraine FOB Odessa ($/t).

The strong export dynamic in Ukraine leads to a sharp increase of prices FOB Odessa, reaching 181 $/t at the end of January, +12 % more than prices displayed at the harvest. Logistical issues are also a reason why prices are supported at a time where snow is at a record level in some parts of the country.

However, this dynamic must be monitored, because corn stocks are still very high in Ukraine and a selling pressure could be awaited after winter.

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