Ukrainian agrarians harvested corn from 40% area

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.

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