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Corn Exports From Ukraine to Climb, Boosting Global Supply

Friday, 24 February 2012 | 00:00
Corn exports from Ukraine (US09EXUA), vying with Argentina as the second-biggest shipper, may jump 20 percent as bumper harvests boost stockpiles, said an official.
Sales may increase to 15 million metric tons in 2012-2013 from 12.5 million tons this year, according to Andrew Druzyaka, advisor at the State Food & Grain Corp. of Ukraine. That would be a record, according to U.S. Department of Agriculture data.
More supplies from the former Soviet state would add to global inventories as farmers in the U.S., the biggest exporter, expand acreage to the highest level since 1944. That would help fill the gap left by lower drought-hit crops in Argentina and increasing imports by China as diets improve and incomes rise.
While Goldman Sachs Group Inc. (GS) predicts a 7.5 percent increase in prices in three to six months, the bank expects that “a large supply response will help rebuild corn inventories and bring prices lower” in 12 months time. Corn futures in Chicago tumbled 9 percent in the past year to $6.415 a bushel today.
The next harvest in Ukraine may climb to 25 million tons to 27 million tons from 22.8 million tons this year as farmers plant corn in winter-wheat areas damaged by freezing weather, Druzyaka said in an interview in Singapore today.
Argentina, U.S.
Ukraine and Argentina may ship 14 million tons each in 2011-2012, tying for second place as a global supplier after the U.S. with 43.2 million tons, according to the USDA.
The 2012 crop in the U.S. may reach 14.235 billion bushels, the most on record dating to 1866, after planting reaches 94 million acres, the biggest since 1944, the USDA said Feb. 13. It will update its forecasts today at the annual Outlook Forum.
The agency cut its estimate of Argentine production to 22 million tons this month from 26 million tons in January after drought wilted crops. Imports by China, the second-biggest user, may jump fourfold to 4 million tons, the USDA says.
About 3 million hectares (7.4 million acres) of land planted to winter grain in Ukraine will need to be replanted after drought and frosts hurt crops, Druzyaka said, citing data from the state statistics agency.
Corn stockpiles will jump more than threefold to 4.7 million tons before the next harvest from 1.2 million tons a year earlier, he said.
Source: Bloomberg
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