Victoria Fedchenko 
Commodity Broker
Northstar Brokerage

As the 2025/26 marketing year draws to a close, Ukraine’s grain sector finds itself in an unusual position. Despite ongoing war-related disruptions, the country has managed to maintain stable production and export flows. However, elevated carryover stocks, growing competition from Russia and the European Union, and increasingly selective buying behavior in key destination markets are putting unprecedented pressure on margins across the supply chain. For traders, the question is no longer how to move grain out of Ukraine, but how to remain profitable in a market where buyers increasingly dictate prices.

ENDING THE SEASON WITH ELEVATED STOCKS

As of June 12, Ukraine had exported 34.94 MMT of grain and pulses, down 11.7% year-on-year. Export volumes included:

• Corn: 19.92 MMT
• Wheat: 13.09 MMT
• Barley: 1.48 MMT

Despite a pickup in shipments during the second half of the season, Ukraine is expected to enter the 2026/27 marketing year with elevated carryover stocks. The increase in inventories reflects slower export execution during the first half of the season, repeated disruptions to logistics infrastructure, and softer demand across key destination markets. 

GLOBAL SUPPLY IS GROWING

The challenge is that Ukraine is not alone. What to expect in the nearest 3 month?  From one side:

• Russia is also expected to increase grain carryover stocks, with ending inventories projected to rise by approximately 15% year-on-year, grain production is expected between 126 MMT, including wheat at 88 MMT.
• According to USDA FAS, total EU grain production in the 2026/27 marketing year is expected to return to average levels at approximately 277.2 MMT (with UK – 296 MMT) compared to an estimated 288.8 MMT in 2025/26. Wheat production (excluding durum) is expected at 143.7 mln t, down from the 150.8 mln t in 2025. 
• Turkey, one of Ukraine's key importers, is heading for a strong harvest.
  Current expectations suggest Turkey as main importer of wheat could harvest 23–24 MMT of wheat, reducing its import requirements and increasing the risk of renewed import restrictions similar to those implemented in 2024.
• Egypt, another key destination for Black sea grain, remains well supplied and in no rush to buy. Approximately 1.5 MMT of wheat is still waiting to enter the domestic market, while corn demand is increasingly shifting toward August–September shipments with a preference for Brazilian origin.

The result is clear: supply can grow faster than demand. Grain prices are expected to remain under seasonal pressure during the harvest period.

From another side, we are facing with delayed harvest campaign across Ukraine, Russia and Turkiye due to a cold spring, rains and excessive soil moisture. A later harvest may provide temporary support to Black Sea grain prices by delaying the arrival of new-crop supplies.

GEOPOLITICAL RISKS: THE NEW MARKET DRIVER

In 2026, geopolitical risks remain the dominant factor shaping trade flows, logistics costs and market sentiment. Repeated Russian attacks on port infrastructure, railway hubs and storage facilities continue to disrupt operations and increase costs. 

Recent strikes have damaged assets and infrastructure linked to major global agribusiness companies. Businesses are increasingly facing higher insurance costs, extended loading windows and greater uncertainty regarding contract execution. Repeated attacks have also forced companies to allocate additional resources to infrastructure repairs and risk mitigation.

The escalation of tensions involving Iran has added another layer of uncertainty to global grain trade. The Strait of Hormuz handles roughly one-fifth of global oil flows and remains a critical chokepoint for energy and maritime trade. Concerns over potential disruptions have increased bunker fuel prices, war-risk insurance premiums and freight volatility across key shipping routes. Any disruption to shipping routes or energy markets directly affects the competitiveness of Ukrainian grain in its key export destinations.

WHAT SHOULD UKRAINE EXPECT?

The outlook for 2026/27 suggests a market increasingly driven by buyers rather than sellers. Several factors are converging simultaneously:

• Higher global harvest expectations;
• Import duties and quotas imposed by the European Union;
• Strong competition from alternative origins;
• Larger Russian carryover stocks;
• Stronger Turkish domestic supply;
• Egypt remains well supplied.

Ukrainian farmers remain cautious about forward sales. Unlike previous years, many producers are reluctant to lock in prices at current levels, preferring to wait for greater market clarity. Also rising production costs continue to reshape selling behavior. Higher expenses for fuel, fertilizers, labor and logistics have significantly increased breakeven levels for farmers. At the same time, improved financial resilience among agricultural producers means they are under less pressure to sell immediately after harvest.

WHERE WILL DEMAND COME FROM?

The most promising destinations remain:

• Egypt and the broader North African region;
• Turkey, despite the risk of import restriction for wheat, but more support on corn;
• Southeast Asia, particularly Indonesia and Vietnam;
• Non-traditional markets in Sub-Saharan Africa.

However, these markets are expected to remain highly price-sensitive and increasingly opportunistic in their purchasing behavior.

Ukraine has repeatedly demonstrated its resilience and adaptability under extraordinary circumstances. Yet in the coming season, success will depend less on production volumes and more on the ability to secure demand in an increasingly oversupplied and geopolitically volatile market.