January WASDE maintains forecast for corn use in ethanol

By Erin Voegele | January 10, 2020

The USDA maintained its 2019-’20 forecast for corn use in ethanol in its latest World Agricultural Supply and Demand Estimates report, released Jan. 10. The forecast for corn production increased slightly.

In its January WASDE report, the USDA said the current 2019-’20 U.S. corn outlook predicts higher beginning stocks; slightly higher production; reduced food, seed and industrial use; larger feed and residual use; lower exports; and smaller ending stocks.

Beginning stocks are raised 107 million bushels, reflecting upward revisions to both on-farm and off-farm stocks as of Sept. 1. Corn production is estimated at 13.692 billion bushels, up 31 million bushels. USDA attributed the increase to higher yields that more than offsets a reduction in harvested area.

Total corn use is up 155 million bushels, to 14.07 billion bushels. Exports are reduced 75 million bushels to 1.775 billion. USDA said the reduction reflects the slow pace of shipments through December and the lowest level of outstanding sales as of early January since the 2012-’13 marketing year. Food, seed and industrial use is lowered 20 million bushels, with lower projected corn use for starch, glucose and dextrose, and high fructose corn syrup. Feed and residual use is increased 250 million bushels to 5.525 billion bushels based on the indicated disappearance during the September-November quarter and the 2018-’19 marketing year. USDA predicts that 5.375 billion bushels of corn will go to ethanol production during the 2019-’20 crop year, nearly level with the 5.376 billion bushels the agency estimates went to ethanol production in 2018-’19, but down from 5.605 billion bushels in 2017-’18. With use rising more than supply, 2019-’20 corn stocks are reduced 18 million bushels. The season-average corn price received by producers is unchanged at $3.85 per bushel.

Foreign corn production is forecast higher with increases for Bangladesh, Russia, and the EU. Corn exports for 2019-’20 in the Ukraine and EU are raised. For 2018-’19, Brazil’s exports for the marketing year beginning in March 2019 are raised based on observed shipments to date. China’s corn feed and residual use is raised for both 2018-’19 and 2019-’20. Foreign corn ending stocks are lower, mostly reflection reductions for China and Brazil. Global corn stocks are down 2.8 million tons, at 297.8 million tons.