USDA WASDE maintains forecast for corn use in ethanol

By Erin Voegele | June 11, 2019

The USDA maintained its forecast that 5.5 million bushels of corn will go to ethanol production in the 2019-’20 crop year in its World Agricultural Supply and Demand Estimates report released June 11, up slightly from the 5.45 billion bushels of corn used to make ethanol in 2018-’19.

In the June WASDE, USA said the 2019-’20 corn outlook is for increased beginning stocks and imports, sharply lower production, reduced feed and residual use and exports, and smaller ending stocks.

Beginning stocks are up reflecting a 100-million-bushel decline in projected exports for 2018/19 to 2.2 billion bushels, based on current outstanding sales and reduced U.S. price competitiveness. Corn production for 2019-‘20 is forecast to decline 1.4 billion bushels to 13.7 billion, which if realized would be the lowest since 2015/16.

Unprecedented planting delays observed through early June are expected to prevent some plantings and reduce yield prospects.

With sharply lower supplies, use is projected to decline 425 million bushels to 14.3 billion, based on reductions to feed and residual use and exports. With supplies falling more than use, ending stocks are projected to decline 810 million bushels to 1.7 billion, which if realized would be the lowest since 2013-‘14. The season-average farm price is raised 50 cents to $3.80 per bushel.

Argentina corn production is raised on increased area with higher prices. Canada corn production is lowered on reductions to both area and yield with planting delays in Ontario. Russia corn production is higher based on government data indicating larger-than-expected planted area. For 2018-‘19, Brazil corn production is raised based on the latest government statistics.

Major global trade changes for 2019-‘20 include larger forecast corn exports for Argentina and Russia, with a partly offsetting reduction for Zambia. For 2018-‘19, exports are raised for Brazil and Argentina for the local marketing year beginning in March 2019 based on higher than-expected shipments during May. Foreign corn ending stocks are lowered from last month mostly reflecting reductions for Argentina, Brazil, Canada, and the EU.