Ukraine Grain: Tight Stocks, Price Volatility Likely for Years

March 31, 2022

Key Points

  • Global grain markets have been managing through a period of extreme price volatility following Russia’s military invasion of Ukraine. While markets are somewhat calmer now vs. three weeks ago, CoBank sees tight stocks-to-use and price volatility continuing for at least two growing seasons. This report focuses on two major grain crops that Ukraine exports: corn and wheat.
  • Our base case assumes reductions to Ukraine’s current year plantings of corn and wheat and a smaller winter wheat harvest in July/August. These assumptions result in a tightening in available stocks-to-use ratios for both commodities. Our forecast calls for corn available stocks/use decreasing from 6.6% in 2021-22 to 4.0% in 2022-23, and wheat decreasing from 15.0% to 10.5%, respectively (“available” stocks exclude Ukraine and China).
  • In the near-term, we see India, Europe, and Australia filling some of the expected shortfall in Ukraine’s wheat exports to the Middle East and North Africa, while the U.S., Brazil and Argentina should be able to pick up the majority of the corn export slack. We acknowledge that Russian wheat and corn exports could also decline due to trade finance restrictions, but have purposely excluded Russia from this analysis.
  • Balancing all factors, grain prices and volatility are both likely to remain elevated (regardless of when the war actually ends) as markets continually assess real and perceived grain supply shortages and re-adjust risk premiums. High fertilizer prices, crop chemical shortages, and ongoing supply chain problems will contribute to the volatility.
  • The current and expected volatility in grain trading has immediate financial implications for U.S. grain cooperatives and multi-national grain traders. It will require higher capital levels and excess liquidity to fund the acquisition and storage of grain and cover increased hedging costs.

Read the Report


Disclaimer: The information provided in this report is not intended to be investment, tax, or legal advice and should not be relied upon by recipients for such purposes. The information contained in this report has been compiled from what CoBank regards as reliable sources. However, CoBank does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions, and data included in this report. In no event will CoBank be liable for any decision made or actions taken by any person or persons relying on the information contained in this report.


Stay ahead of the game in your field. Subscribe today.

Get CoBank's industry-leading Knowledge Exchange research reports delivered straight to your inbox as soon as they're released.

Have a comment or question about these reports?

Contact CoBank's Knowledge Exchange team to ask questions, engage with analysts or receive additional information.