Ukraine corn harvest to strain storage as exports stall

Ukraine's corn harvest is set to intensify pressure on grain storage, as slow exports, occupied elevators and higher storage costs push farmers toward temporary bags, risky facilities or delayed harvesting.

Ukraine could face a domestic grain storage shortfall of 8 million-11 million metric tons in November if exports remain slow, agrarian policy and food minister Taras Vysotsky said Aug. 14.

The corn harvest is expected to start by October, with wheat and rapeseed already occupying storage. Blocked port operations and slow export flows have reduced stock turnover.

About 90% of storage facilities were already booked or full, a Ukrainian broker said. Remaining capacity includes facilities close to the war zone, where users would face the risk of total loss and generally lack insurance cover for grain stored inland.

Storage costs have risen 45%-55% since the escalation of the Russia-Ukraine war and could rise by up to 70% by the autumn if logistics disruptions force grain from elevators to polymer bags, market participants said.

"It will be harsh, with not much spare capacity, but big holdings are preparing — buying silo bags and clearing elevator space for corn," a seller from Ukraine said.

Smaller producers may rely on on-farm warehouses, though limited capacity could delay harvesting.

"Smaller farmers already have warehouses on their farms, and I would not exclude them leaving corn in the fields until spring, as Ukraine did this season," the seller said.

Some traders were less concerned, noting the availability of emergency alternatives.

"I don't think we're going to have a storage problem, as farmers may use plastic bags or sleeves. They did so in 2022-23. In the worst case, they may leave corn in the fields until spring," another seller from Ukraine said.

Leaving corn unharvested through winter could lead to yield and quality losses, with each farmer weighing the risk, the second seller said.

Uncertainty over the harvest and new crop availability has slowed regional selling, leaving limited price indications.

"We don't have any special strategy on new corn trade, will decide on the spot," a corn seller said.

Platts, part of S&P Global Energy, assessed Ukraine corn FOB POC at $221/mt on Aug. 14 for Sept. 11-25 loading.