War in Ukraine and low yields in the EU worsen corn balance sheet

UkrAgroConsult

Article author:

Maryna Marynych

Grain Market Analyst

Ukraine

As of January 12, 85% of the corn areas were harvested in Ukraine, 23.5 M mt collected with an average yield of 6.57 mt/ha. The largest corn areas still to be harvested are in Sumy and Poltava regions (146 Th ha and 131 Th ha, respectively).

The slow harvesting rates of this late spring crop in Ukraine results are explained by:

• the ongoing hostilities,
• a shortage of grain storage capacities and high storage costs,
• slow corn exports,
• rising prices of fuel and other input supplies, high cost of grain drying.

The temporary blockade of Ukraine’s Black Sea ports modified considerably the 2022/23 corn exports. Corn exports were above-average in the first two months of the season (September-October), this was stimulated by significant carryovers from 2021 harvest. The November-December shipments were lower than usually with upward trends as wheat and barley exports decreased gradually those months giving room for corn handing in the port terminals.

Although the total exports were below the five-year average, almost 10 M mt of corn was shipped abroad in September-December 2022/23, or 2% more than a year earlier.

russia

As of December 31, the corn harvest in russia was 86% complete with 14.8 M mt collected. The slow harvest pace stemmed from a shortage of storage capacities amid a bumper wheat crop. This particularly concerns the southern regions. They are situated close to the seaports; siloes in these regions were filled up with wheat.

Severe frost in russia in January 2023 will most probably make it difficult to harvest the remaining 14% of corn area. The corn crop will likely amount to 15.4 M mt, a bit more than the 2021 crop. The quality of late-harvested grain will be questionable.

The export potential of russian corn is quite high because high carryovers from last season (2021/22) and weak exports in the first months of the season. Although the harvest even exceeded last year’s one, corn exports in the season’s first three months (September-November 2022) was 50% less as for the same time in 2021.

EU

In the EU, the corn harvest situation is fundamentally different from that in Ukraine and russia. The corn harvest was reduced substantially by drought that damaged late-season grains. In total, the 2022 corn crop in EU countries is one-third less than in 2021. High drought-related losses led to high harvesting rates, lower domestic consumption and growing corn imports from both Ukraine and Brazil.

Romania now hosts the largest corn area in the EU – some 2.5 Ml ha. However, a yield slump in 2022 halved corn output to about 7.5 M mt (13.5 M mt in 2021). Romania’s impact on the European market has weakened significantly in the current 2022/23 season.

A similar yield drop registered in other countries of the region – Hungary, Slovakia. At the same time, Bulgaria and Slovenia less suffered from the drought. The 2022 corn production in Bulgaria dropped by 24% y/y, corn areas in Slovenia are negligible small.

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Tags: harvesting, Slovakia, Ukraine, Russia, Bulgaria, corn, Romania, EU