USDA WASDE lowers production for corn use in ethanol

By Erin Voegele | April 10, 2020

The USDA lowered its 2019-’20 forecast for corn use in ethanol by 375 million bushels to 5.05 billion bushels in its latest World Agricultural Supply and Demand Estimates report, released on April 9.

The agency’s corn outlook for 2019-’20 is for reduced imports; greater feed and residual use; lower food, seed and industrial use; and larger stocks. Feed and residual use is raised 150 million bushels to 5.675 billion. This is based on corn stocks reported as of March 1, which indicated disappearance during the December-February quarter rose about 4 percent relative to a year ago. Lower forecast corn used for ethanol also supports larger feed and residual use.

Corn use for ethanol is lowered 375 million bushels to 5.05 billion bushels based on the latest indications from U.S. Energy Information Administration data, which indicates an unprecedented decline in ethanol production and motor gasoline consumption as a result of COVID-19. According to the USDA, 5.378 billion bushels of corn went to ethanol production in2018-’19, down from 5.605 billion bushels in 2017-’18.

Partly offsetting the decrease in corn use for ethanol is an expected increase in the amount of corn used for alcohol beverages and manufacturing use. With supply down fractionally and use declining, ending stocks are raised 200 million bushels to 2.092 billion. The season-average marketing weighted corn price received by producers is lowered 20 cents to $3.60 per bushel.

Internationally, corn production is raised for the EU and Belarus, with partly offsetting reductions for Indonesia and Laos. Major global trade changes for 2019-’20 include higher projected corn exports for the EU, with a partially offsetting reduction for Russia. Corn imports are raised for South Korea, Turkey, Algeria, and Indonesia, with lower projections for Vietnam, Taiwan, Cuba and Mexico. Foreign corn ending stocks are raised, mostly reflecting increases for Thailand, Taiwan, India and Turkey that more than offset declines for Argentina and Mexico. Global corn ending stocks, at 303.2 million tons, are up 5.8 million from last month.