WASDE: Projected corn use for ethanol lowered slightly

By Erin Voegele | July 12, 2016

The USDA has released the July edition of its World Agricultural Supply and Demand Estimates report, noting corn beginning stocks for 2016-’17 are lowered 7 million bushels, as reductions in 2015-’16 feed and residual use and use for ethanol production are more than offset by increases in exports and seed use.

Corn production for 2016-17 is projected 110 million bushels higher, reflecting the increased planted and harvested areas from the USDA’s June 30 Acreage report.

Projected 2016-’17 corn use is raised 30 million bushels as increased prospects for exports and higher see use more than offset lower projected use for feed, residual and ethanol production. Exports are projected 100 million bushels higher due to reduced competition from Brazil. Projected feed and residual use for 2016-’17 is lowered despite the larger crop, reflecting implications in the lower-than-expected disappearance for 2016-’16 indicated by the June 30 Grain Stocks report. Projected corn use for ethanol is lowered 25 million bushels, in line with changes for 2015-’16 driven by the latest data from the USDA’s Grain Crushings and Co-Products Production report.

Corn ending stocks for 2016-’17 are projected 73 million bushels higher, with projected season-average prices received by producers for 2016-’17 lowered for all grains. The projection for corn is down 10 cents, to $3.10 to $3.70 per bushel. For 2015-’16, the corn price is lowered 5 cents at the midpoint to a range of $3.60 to $3.70 per bushel.

Brazil corn production for 2016-’17 is reduced 2 million tons based on lowered yield expectations, while 2015-’16 corn production is lowered 7.5 million tons. Canada 2016-’17 corn production is lowered 1.3 million tons. Argentina corn production for 2015-’16 is raised 1 million tons.

EU corn imports are lowered for 2015-’16 and 2016-’17. Brazil corn exports are lowered for 2015-’16 and 2016-’17, down 4 million tons and 1 million tons, respectively. Global corn ending stocks for 2016-’17 are projected 3.3 million tons higher, mostly on a 2.1 million ton increase for China. Outside of China, corn stocks are 1.2 million tons higher with larger stocks for the U.S. and Indonesia more than offsetting reductions for Brazil, Japan and China.