Impact of Decreased Corn Harvest on Prices in Ukraine

Weather Impact on Crop Yields

The Ukrainian corn market is experiencing significant fluctuations due to forecasts of a decreased harvest. The Ministry of Agricultural Policy of Ukraine estimates that the average yield of early crops will decrease by only 5%. However, the yield of late crops, including corn, is expected to decrease by 15% due to abnormal heat in most regions. This report examines the factors contributing to these changes and their implications for exporters.

Abnormal Heat and Low Soil Moisture

Recent temperatures in Ukraine have normalised, but rainfall remains patchy. This has resulted in low soil moisture reserves in many regions. It is causing plants to dry out and deteriorating soybean and corn crops. The reduction in soil moisture is particularly detrimental to late crops like corn. Which are more vulnerable to prolonged heat and dryness. During the past week, purchase prices for corn of the new harvest with delivery to the port in October-November increased.

Export Data and Market Comparisons

Ukraine has exported 1.47 million tonnes of corn for the 2024/25 marketing year, compared to 1.1 million tonnes for the same period last year. This increase in exports is a positive indicator despite the challenges faced by domestic production. In the international market, December corn futures in Chicago fell by 0.7% over the week. The decline is attributed to favourable weather and active exports from the US. According to NASS USDA data, 30% of the US corn crop is in the test stage, which is 8% higher than the average 5-year indicator. Additionally, the number of corn crops in good or excellent condition increased by 1% to 68%, compared to 55% last year.

US and Brazilian Corn Exports

The US has reached 46.66 million tonnes of corn exports in the 2023/24 fiscal year, 34% ahead of the previous year’s pace. This is expected to exceed the USDA forecast of 47.7 million tonnes by the end of the season on August 31. In Brazil, according to AgRural estimates, 91% of the second harvest corn was collected as of July 28, compared to 55% last year. This increase allows Brazil to enhance its exports, strengthening competition in the global market.

The Ukrainian corn market is facing significant challenges due to abnormal weather conditions and low soil moisture. These factors have led to reduced yields and increased prices. The increase in purchase prices for corn, supported by rising export prices for fodder wheat, reflects the current market state. The fluctuations in corn futures also suggest increased pressure on Black Sea corn prices.

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