Corn – what will be the harvest, drying price and forecast

02/ 11/ 2021

Last year, according to UBTA, more than 15% of corn in foreign markets came from Ukraine. This makes our country one of the largest corn exporters in the world. In terms of the cost of export deliveries, we took the 4th place in the world, ahead of us only by the USA, Brazil and Argentina. Therefore, lets see how the conditions for the current season have developed for the crop, which is of great importance for the Ukrainian sector, the yield of corn in the regions and what will happen to the price of grain in the near future. The growing season and weather conditions of the season. Only in mid - June, maize sowing was completed in almost all regions of the country. This year, the area under this crop amounted to 5.3 million hectares. The current sowing campaign had its own nuances. So, in the Zhytomyr region, due to waterlogging of the soil, the farms had to wait with sowing - the equipment simply could not leave the field. Crops of most of the intense corn hybrids this season experienced late spring and settled in cold soil. Abundant rains in late spring and early summer in the Odessa region also made local farmers nervous - some of the fields were flooded. But fortunately, there were no large - scale losses. Streams of water flooded the apiary and washed the gardens of local residents, flooded the cellars and barns. The spring waterlogging was replaced, unfortunately, by the traditional summer heat. Not only the southern regions suffered from it. Yes, the agrarians of Sumy oblast did not see precipitation in the summer for more than a month - the sun simply burned out the earth. There were no moisture problems in the Poltava region from spring to the end of June. And then came a sharp heat and a complete lack of precipitation. Harvest, grain condition and yield. Since mid-September, corn threshing has already started in most regions, and as of the end of October in Ukraine, more than 32% of the corn acreage has been threshed. More than 11 million tons of crops have been threshed, with an average yield of 6.3 t / ha. The agrarians of the Khmelnytskyi region are still the record holders - here the yield is 11 t / ha. The anti-record was set by the Luhansk region - 2.8 t / ha. At the same time, this season, corn is supplied to elevators with a very high moisture content. The expert emphasized that uneven precipitation in the regions and systemic and prolonged heat force the agrarians to constantly take into account the amount of moisture in the soil. But if the agronomist still does not understand that accumulating and retaining moisture is two big differences, then, unfortunately, he will not receive a potential harvest. Storage. The issue of grain storage is further complicated by the situation with energy prices, in particular for gas, which is used to dry grain. As a result, some powerful elevator complexes refuse to store grain from uncontracted companies and small farmers. Farmers who do not have their own dryers and warehouses are forced to sell their crops immediately, since it is unprofitable to transport grain to more distant elevators. Grain drying tariffs have already tripled and this is not the limit, we are confident in G.R. Agro, which provides grain storage services. The company received an offer to purchase gas in October at UAH 38 / cubic meter, which was previously purchased at a price of UAH 19 to 28 / cubic meter. The situation for us is very depressing. It can become a disaster, we can dry it only with gas. There are elevators in the country that operate on alternative energy sources, but there are very few of them, said the chief operating officer of G.R. Agro Artem Rempen. Despite energy problems, G.R. Agro was assured that agricultural producers are not denied import for storage. Therefore, as soon as a place appears after the shipment of grain, it is accepted for storage, regardless of the size of the farm. Despite this situation, many farmers are putting into operation diesel - powered dryers. Domestic and foreign markets. Since the beginning of 2021/22 MY, Ukraine has already exported 13.1 million tons of grain and leguminous crops, of which corn - 1.3 million tons, which is 769 thousand tons (56%) more than last year. At the country level, China was the main importer of Ukrainian corn - by $ 1.38 billion (28.3%). And the export volumes to Egypt and the Netherlands turned out to be almost identical - a little more than $ 500 million (10% each). This year, the structure of corn exports is practically the same as the previous one. The lions share of exports goes to the EU, China, Egypt, Turkey, Iran and Korea. In 2021, China increased its share even more to 32.5% and today is the main importer of our corn. In the Ukrainian market, prices remain stable, despite the increase in the supply of new harvest grain. As of the end of October, the price of corn in the ports of Nikolaev and Odessa region is 7 401 UAH / t. At the same time, last year, in October alone, the cost of corn increased by almost UAH 2,000 / t, which indicated a rapid upward trend. This year, since the beginning of the month, the rise in price amounted to only UAH 300 / t, which is an insignificant increase compared to last year. Therefore, in general, there is a positive trend for the corn market. Given the particular vulnerability of agriculture to climate change, in order to maintain this dynamic, farmers need to adapt urgently. This includes switching to more economical tillage tools and technologies, increasing the area under irrigation, and choosing hybrids that will allow for a high corn yield despite unfavorable climatic conditions.

Therefore, let’s see how the conditions for the current season have developed for the crop, which is of great importance for the Ukrainian sector, the yield of corn in the regions and what will happen to the price of grain in the near future.

The growing season and weather conditions of the season

Only in mid – June, maize sowing was completed in almost all regions of the country. This year, the area under this crop amounted to 5.3 million hectares.

The current sowing campaign had its own nuances. So, in the Zhytomyr region, due to waterlogging of the soil, the farms had to wait with sowing – the equipment simply could not leave the field.

Crops of most of the intense corn hybrids this season experienced late spring and settled in cold soil. Abundant rains in late spring and early summer in the Odessa region also made local farmers nervous – some of the fields were flooded. But fortunately, there were no large – scale losses.

Streams of water flooded the apiary and washed the gardens of local residents, flooded the cellars and barns.

The spring waterlogging was replaced, unfortunately, by the traditional summer heat. Not only the southern regions suffered from it. Yes, the agrarians of Sumy oblast did not see precipitation in the summer for more than a month – the sun simply burned out the earth.

There were no moisture problems in the Poltava region from spring to the end of June. And then came a sharp heat and a complete lack of precipitation.

Harvest, grain condition and yield

Since mid-September, corn threshing has already started in most regions, and as of the end of October in Ukraine, more than 32% of the corn acreage has been threshed. More than 11 million tons of crops have been threshed, with an average yield of 6.3 t / ha.

The agrarians of the Khmelnytskyi region are still the record holders – here the yield is 11 t / ha. The anti-record was set by the Luhansk region – 2.8 t / ha.

At the same time, this season, corn is supplied to elevators with a very high moisture content.

The expert emphasized that uneven precipitation in the regions and systemic and prolonged heat force the agrarians to constantly take into account the amount of moisture in the soil. But if the agronomist still does not understand that accumulating and retaining moisture is “two big differences”, then, unfortunately, he will not receive a potential harvest.

Storage

The issue of grain storage is further complicated by the situation with energy prices, in particular for gas, which is used to dry grain.

As a result, some powerful elevator complexes refuse to store grain from uncontracted companies and small farmers.

Farmers who do not have their own dryers and warehouses are forced to sell their crops immediately, since it is unprofitable to transport grain to more distant elevators.

Grain drying tariffs have already tripled and this is not the limit, we are confident in G.R. Agro, which provides grain storage services. The company received an offer to purchase gas in October at UAH 38 / cubic meter, which was previously purchased at a price of UAH 19 to 28 / cubic meter.

“The situation for us is very depressing. It can become a disaster, we can dry it only with gas. There are elevators in the country that operate on alternative energy sources, but there are very few of them,” said the chief operating officer of G.R. Agro Artem Rempen.

Despite energy problems, G.R. Agro was assured that agricultural producers are not denied import for storage. Therefore, as soon as a place appears after the shipment of grain, it is accepted for storage, regardless of the size of the farm.

Despite this situation, many farmers are putting into operation diesel – powered dryers.

Domestic and foreign markets

Since the beginning of 2021/22 MY, Ukraine has already exported 13.1 million tons of grain and leguminous crops, of which corn – 1.3 million tons, which is 769 thousand tons (56%) more than last year.

At the country level, China was the main importer of Ukrainian corn – by $ 1.38 billion (28.3%). And the export volumes to Egypt and the Netherlands turned out to be almost identical – a little more than $ 500 million (10% each).

This year, the structure of corn exports is practically the same as the previous one. The lion’s share of exports goes to the EU, China, Egypt, Turkey, Iran and Korea. In 2021, China increased its share even more to 32.5% and today is the main importer of our corn.

In the Ukrainian market, prices remain stable, despite the increase in the supply of new harvest grain. As of the end of October, the price of corn in the ports of Nikolaev and Odessa region is 7 401 UAH / t.

At the same time, last year, in October alone, the cost of corn increased by almost UAH 2,000 / t, which indicated a rapid upward trend. This year, since the beginning of the month, the rise in price amounted to only UAH 300 / t, which is an insignificant increase compared to last year.

Therefore, in general, there is a positive trend for the corn market. Given the particular vulnerability of agriculture to climate change, in order to maintain this dynamic, farmers need to adapt urgently. This includes switching to more economical tillage tools and technologies, increasing the area under irrigation, and choosing hybrids that will allow for a high corn yield despite unfavorable climatic conditions.