USDA lowers corn ending stocks based on new ethanol crush report

By Susanne Retka Schill | March 10, 2015

USDA lowered the projected corn ending stocks in the March World Agriculture Supply and Demand report by 50 million bushels.

Corn use for ethanol production was the main focus of the forecast discussion this month, as it was the first report to incorporate the newest data being collected from the ethanol industry. The National Agricultural Statistics Service is surveying ethanol producers on a monthly basis for its new Grain Crushing and Co-Products Production report. “Reported corn use for ethanol for October through January implies a higher conversion rate than previously assumed,” the Dec. 10 WASDE report says. “Partly offsetting the impact of the higher conversion rate is higher-than-expected December ethanol production and a stronger-than-expected pace of weekly production through February as reported by the Energy Information Administration.” Corn use for ethanol production is now project to be 5.20 billion bushels for the current marketing year, down from the 5.25 billion bushels projected in last month’s report. That compares with 5.134 billion bushels estimated in 2013/14. The adjustments made based on the new ethanol crush and coproducts report will be further detailed in the Feed Outlook to be released March 12 by the Economic Research Service.

The reductions in projected corn use for ethanol was offset by an equal, 50-million-bushel increase in projected feed and residual use, leaving domestic use unchanged. Corn exports, however, are projected 50 million bushels higher bringing projected ending stocks down. USDA projects the season-average farm price for corn at $3.50 to $3.90 per bushel, up 5 cents at the midpoint from last month’s projections.  

USDA projections for farm-level prices for sorghum put the alternative ethanol feedstock above the price of corn. “The sorghum farm price projection is also narrowed and raised 10 cents at the midpoint to $3.70 to $4.10 per bushel,” the WASDE report said, reflecting farm prices reported through January.

Global corn production for 2014/15 is lowered 1.6 million tons with reductions for South Africa and Belarus only partly offset by an increase for Argentina. South Africa corn output is lowered 2 million tons as February dryness and periodic heat, particularly in the western and central corn growing regions, coincided with corn pollination. Corn production is lowered 100,000 tons for Belarus based on indications of lower harvested area from the Ministry of

Agriculture. Argentina corn production is raised 500,000 tons as a small reduction in harvested area due to recent flooding is more than offset by higher expected yields with abundant soil moisture available for pollination and grain fill in other areas. Developing dryness in southern growing areas, however, limits this month’s yield increase.

 

Global coarse grain consumption for 2014/15 is raised 2.7 million tons mostly on higher barley and millet use.  Corn imports are raised for Saudi Arabia and Israel. In addition to the United States, corn exports are raised for Argentina and Brazil, more than offsetting a reduction for South Africa. Global coarse grain ending stocks for 2014/15 are lowered 5 million tons with corn ending stocks down 4.4 million. Projected foreign corn ending stocks are lowered 3.1 million tons with reductions for South Africa and Argentina.