Ukraine is heading for another bumper harvest of corn in the next marketing year that starts Oct. 1 and output may rise 5.3% to 24 million metric tons, the International Grains Council said Friday.

Exports are likely to be unchanged in 2012-13 around this year's projected record level of 14 million tons, IGC said. Ukraine's corn exports were around 5.0 million tons in 2010-11, it said.

Ukraine is now on the verge of slipping past Argentina as the world's second largest corn exporter after the U.S.

Due to drought-hit output, Argentina's corn exports in the current marketing year that started March 1 may fall 20% to 12.5 million tons, IGC said.

Ukraine's emergence as a major corn exporter is cited by analysts as the single most important factor that dragged down corn prices after they hit a record in June last year.

Until a few years ago, Ukraine was a relatively small player in the global corn trade but tight supply in the U.S., the world's top exporter, and expansion of local plantings, pushed up exports in a big way.

As China turned a major importer from a net exporter three years ago and snapped up cargoes from the U.S., other buyers turned to Ukraine to meet their needs.

Japan, world's largest corn importer, purchased at least 1.5 million tons of feed-grade corn for January-March shipment--almost half of its needs--from Europe to cut costs amid higher U.S. prices. Traders say most of this European corn was shipped to Japan from Ukraine.

In Ukraine, corn planting was almost complete by mid-May, IGC said. Due to rising demand and good profitability, usable area has increased sharply in recent years, rising from 1.1 million hectares in 2001/02 to an estimated 3.5 million tons in 2011/12.

Reflecting solid export demand and the replanting of some frost-damaged winter grains, this year's corn acreage is forecast to increase 31%, to around 4.6 million hectares.

Yields are projected to be lower than last year's record, but still above average, IGC said.

Many growers who were earlier planning to grow wheat, are now increasingly turning to corn in Ukraine, said a Singapore-based regional head of a global grains trading company in Singapore.

Due to dry weather, Ukraine's wheat output is likely to shrink by around a third to 14 million tons in the marketing year that begins July 1 and will drag down exports by 19% to 4 million tons, IGC said.

-By Sameer Mohindru, Dow Jones Newswires; +(65) 9455-2449; sameer.mohindru@dowjones.com

(END) Dow Jones Newswires

May 25, 2012 08:40 ET (12:40 GMT)