Strong Corn Exports for Russia and Ukraine

Record global corn consumption, large exportable supplies, and favorable exchange rates have supported growth for Russia and Ukraine's corn exports. For example, since 2014, both the hryvina (Ukraine's currency) and ruble (Russia's currency) have depreciated more than 40 percent against the U.S. dollar. Moreover, Russia and Ukraine prohibit plantings of genetically modified corn, therefore providing a competitive edge in certain markets.

For Russia, exports for 2016/17 (Oct-Sep) are projected to break the previous record. Compared with 2011/12, exports have more than doubled. Russia's proximity to both the Middle East and Asia has helped fuel recent growth, as many countries in these regions have boosted imports to meet burgeoning demand.

Ukraine's situation is different: 2016/17 exports are forecast up from last year and the third-largest on record. Ukraine has not seen the degree of Russia's growth, even though the country still manages to export about two-thirds of production. Large exports have been sustained by robust demand from Europe and Asia, as well as growth in North African and Middle Eastern countries.

These trends are noteworthy since Ukraine and Russia compete with the United States in several markets, especially Egypt, South Korea, and Japan. Both Black Sea countries have sustained export growth that helps meet record global corn consumption.

OVERVIEW

Global corn production for 2016/17 is lower from last month with reductions for the United States and Bolivia more than offsetting an increase for Serbia. Global trade is projected slightly higher led by larger imports for Bolivia, Brazil, and the United States more than offsetting a reduction for Indonesia. Exports are raised for the EU and Serbia. The U.S. season-average farm price is up 5 cents to $3.40 per bushel.

PRICES

Since the release of the December WASDE, South American quotes remain elevated on tight nearby supplies relative to other origins. Both Argentine and Brazilian quotes are at $183 and $185 per ton, the same as a month ago. The Black Sea quote has been largely range-bound, ending up $2 per ton to $169 on steady demand for exports. The U.S. quote is up $6 per ton to $165 on strong sales and shipments. Since February 2016, U.S. corn has remained the lowest on a FOB basis, reflecting abundant supplies in the United States relative to other exporters.

TRADE CHANGES IN 2016/17

Selected Exporters

  • EU corn is raised 200,000 tons to 2.0 million in light of the brisk pace for “customs surveillance" data.
  • Serbian corn is boosted 300,000 tons to 2.5 million on account of higher production and competitive prices.

Selected Importers

  • Brazilian corn is raised 700,000 tons to 1.8 million reflecting stronger imports to date. Marketing year (MY) 2015/16 (Mar 2016-Feb 2017) imports are boosted 700,000 tons to 3.0 million on the stronger pace to date. Consequently, trade year 2016/17 (Oct 2016-Sep 2017) imports are raised the same amount to 1.8 million. MY 2015/16 exports are cut 1.5 million tons to 15.0 million on the slower pace to date. With larger imports and smaller exports, domestic consumption is projected higher. Estimated ending stocks are increased modestly, although remain relatively tight. Domestic consumption for 2016/17 is projected higher on growing demand for feed, particularly from the pork and poultry sectors.
  • Bolivian corn is up 300,000 tons to 450,000 partly offsetting the decimated crop.
  • Indonesian corn is cut 700,000 tons to 1.0 million on the slower pace of trade. Importrestrictive policies are also expected to discourage imports.
  • U.S. corn is boosted 150,000 tons to 1.4 million on trade to date.