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Ukraine, EU may offer opportunities for US corn exports

FORT COLLINS, (Colo.): Corn exports out of the United States, the world’s top supplier, are expected to ease from last year’s record but still reach the second-best levels in history. Huge US sales to China are vital in those predictions, but high global prices and successes of competitors could challenge those efforts.

Most analysts think about South America when considering US corn export rivals, but US business is threatened whenever Ukraine has a bumper crop, as was the case this year.

However, Ukraine may have hit some snags as high gasoline prices have increased the cost to harvest and transport corn, which could calm exports in the immediate term. At the same time, the European Union, a key market for Ukrainian corn, has recently mended trade disputes with the United States, which could increase US business to Europe.

Ukraine has pegged its 2021 corn harvest at a record 40 million tonnes (1.57 billion bushels), up almost 10 million from the drought-damaged 2020 crop. That short 2020 crop lifted sales of US corn despite a harvest shortage there as well, albeit less severe.

The influence of Ukraine’s poor 2020 crop on US exports seemed a bit overlooked by the market at the time, especially with the distraction of China’s sudden emergence as top corn importer. China in recent years has been a primary customer of Ukrainian corn.

Per US government data, No. 4 supplier Ukraine is expected to export a record 31.5 million tonnes of corn in 2021-22, which would be up almost 90% from the averages of early last decade. By comparison, US corn exports this year are seen at 63.5 million tonnes off a 383 million-tonne crop.

Delays in Ukraine’s corn harvest due to the high cost of drying the grain are likely apparent in the shipment progress. As of this week, Ukraine’s 2021-22 corn exports stood at 5.5 million tonnes, about the same as a year ago despite last year’s supply dent.

It is uncertain whether lagged Ukrainian corn shipments would redirect sales to the United States as much as last year, especially with steep global prices and freight rates.

Traders thought Brazil’s severe corn shortfall earlier this year would be a boon for US exporters, but that never really materialized as it had in other years with lower Brazilian volumes. It is not entirely clear if that is a symptom of high prices, sinking demand or something else.

Looking ahead to the next harvest, both Ukrainian and US corn farmers are in a similar situation with high fertilizer prices potentially threatening 2022 plantings of the yellow grain.


US and EU leaders agreed in late October to end the dispute over US steel and aluminum tariffs imposed in 2018 by the Trump administration, and Brussels agreed to remove additional retaliatory tariffs in return, such as those on agriculture products. Suspension will begin Jan. 1.

EU countries collectively produce the world’s fourth-largest corn crop, but the bloc is among the largest importers of the grain, much of it from Ukraine. US exporters may now be in the mix, though Europe had a relatively successful harvest in 2021.

Prior to the 2018 tariffs, US corn exports to the EU were on and off, though there were two years in the past decade where shipments exceeded 1 million tonnes. That includes a high of 1.9 million in 2017-18.

China continues to be dominant but unpredictable in the global corn market, and it secured up to 700,000 tonnes of Ukrainian corn two weeks ago despite a cheaper US product. China has been inactive on the 2021-22 US corn scene since May.

Cumulative US corn sales for 2021-22 are strong thanks to the early, large Chinese bookings, though they are below the year-ago levels. When sales to China are subtracted, US corn commitments are very average for the date, so extra interest from European or other buyers might actually be needed to meet this year’s robust expectations.

Ukraine, EU may offer opportunities for US corn exports

Source: Brecorder

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