Ukrainian corn exports to the EU have reached 1.19 million mt, up 2.8% on the marketing year (July to June), the first time Ukraine has exceeded its previous years output this marketing year, according to data from the EU Crops Market Observatory, released Monday.
The growth in exports is attributed to a hot and dry summer in the EU, which led to down revisions in production forecasts for the 2018-19 marketing year, S&P Global Platts reported.
Similarly, the tariff of 25% applied to U.S. corn as a retaliatory measure to the tariffs the U.S. applied on EU steel imports has also aided Ukrainian exports.
Despite the U.S. being the most competitive origin globally – FOB October-loading offers were heard at $159/mt late Tuesday – the tariff has rendered imports uncompetitve.
This has been reflected in the U.S. now being 26.1% lower on the year at 266,872 mt. Imports from Brazil have also slowed significantly on ports being optimized for soy exports. Brazil is now exporting 34.2% less to the EU than the previous marketing year.
Nonetheless, Ukraine is likely face further difficulties as the months of October, November and December arrive as market participants see the value of Ukrainian corn to be inflated.
Some big exporters have struggled to move any deep water vessels so far this year, a phenomenon considered a rarity at this stage.
With harvest pressure set to arrive over the next weeks, market sources expect to see further downside to prices.