19 October 2016
By October 18 Ukrainian farmers harvested corn from 1.75M ha, which is about 40% of total area. Up to the moment reported yield has been at 5.6t/ ha, 9.8M tons of corn is already harvested.
We can estimate that as corn harvesting campaign progresses from South to Northern regions of Ukraine, corn yields are expected to grow – at account of increase of the share of larger agri-holdings with higher than average corn yields. As a result we expect that final corn yields for the current season will be not lower than 6.0t/ha, so that total harvest – not less than earlier projected 25.8M ton. In addition we see upside potential for the crop, most likely final average corn yield will be in range 6.2-6.5t/ha. In last season at the same point of time reported yield has been close to 5.1t/ha, final – 5.7t/ha (please see our Ukrainian agri-statistics for last seasons).
As average net cost per 1 ha of corn (w/o cost of delivery to the port) in the current year can be estimated in the range USD 500-600, with current CPT-port corn price at about USD 145-150/t and average yield of 6.0t/ha, expected profitability of corn for Ukrainian farmers is not less than 25-30% (EBITDA per 1 ha – USD 200). Profitability of farmers, which sold part of their production under forward contracts in April-May, when corn CPT price exceeded USD 170/t, is to be significantly higher.