USDA: July WASDE maintains forecast for corn use in ethanol

By Erin Voegele | July 11, 2019

The USDA has maintained its forecast that 5.5 billion bushels of corn will go to ethanol production during the 2019-’20 crop year in its latest World Agricultural Supply and Demand Estimates report, released July 11. If realized, that volume will be up slightly from the 5.45 billion bushels of corn that went to ethanol production during 2018-’19, but down from 5.605 billion bushels in 2017-’18.

According to the USDA, the 2019-’20 U.S. corn outlook is for larger production and beginning stocks, greater feed and residual use, lower food seed and industrial (FSI) use, and increased ending stocks.

The July 11 WASDE raises corn beginning stocks by 154 million bushels, reflecting lower use forecasts for 2018-’19. Exports are educed based on current outstanding sales and shipments to date, with export inspection data for June the lowest for the month since 2013. Feed and residual use is down based on indicated disappearance during the first three quarters of the marketing year. FSI is lowered with forecast declines in several categories of non-ethanol industrial use.

For 2019-’20, corn production is projected 195 million bushels higher based on increased planted and harvested areas from the USDA’s June 28 Acreage report. Excessive rainfall prevented planting at the time of the Acreage survey, leaving a portion of acres still to be planted for corn in a number of major producing states. The USDA’s National Agricultural Statistics Service will collect updated information on 2019 acres planted in July, and if the newly collected data justify any changes, NASS will publish updated acreage estimates in its August Crop Production report.

According to the USDA, the national average corn yield is unchanged at 166 bushels per acre. Silking as reported in the USDA’s Crop Progress report is behind the recent historical average, thus for much of the crop the critical pollination period will be during late July into early August. Projected feed and residual use is raised 25 million bushels, reflecting a larger crop. FSI is lowered 20 million bushels, reflecting lower projects for non-ethanol industrial use.

With supply rising more than use, stocks are raised 335 million bushels to 2 billion. The season-average corn price received by producers is lowered 10 cents to $3.70 per bushel.

The 2019-’20 foreign coarse grain outlook is for larger production and trade, and slightly lower stocks, relative to last month. Ukraine corn production is raised, reflecting increased area. For 2018-’19, Argentina corn production is higher based on harvest results to date. Major global trade changes for 2019-’20 include higher corn exports for Ukraine, with increased imports for Zimbabwe. For 2018-’19, corn exports are raised for Argentina and Brazil reflecting higher-than-expected shipments during the month of June. Foreign corn ending stocks are virtually unchanged from last month.