WASDE maintains 2020-’21 forecast for corn use in ethanol

By Erin Voegele | June 11, 2020

The USDA reduced its forecast for corn use in ethanol during the 2019-’20 crop year in its latest World Agriculture Supply and Demand Estimates report, released June 11. The forecast for corn use in ethanol during the 2020-’21 crop year, however, was maintained.

According to the report, the current 2020-’21 outlook for U.S. corn is mostly unchanged when compared to the May WASDE, with fractional increase to beginning and ending stocks.

Beginning stocks are raised, as a 45-million-bushel reduction in estimated production for 2019-’20 is largely offset by a 50-million bushel reduction in projected corn used for ethanol. The USDA now expects 4.9 billion bushels of corn to go to ethanol production during the 2019-’20 crop year, down from an estimated 4.95 billion in May.

The agency said corn used for ethanol is lowered reflecting a slower-than-expected rebound in ethanol production as indicated by U.S. Energy Information Administration data during the month of May and into early June.

The USDA currently forecasts that 5.2 billion bushels of corn will go to ethanol production during the 2020-’21 crop year. That prediction is unchanged from the May WASDE.

For 2020-’21, the USDA said with corn supply up slightly and no changes to projected use, ending stocks are 5 million bushels higher at 3.3 billion bushels. The season-average farm price is unchanged at $3.20 per bushel.

Globally, the Brazil outlook for corn production is raised based on higher expected area. For 2019-’20, Brazil corn production is unchanged, as higher indicated area is offset by a reduction in yield. The USDA said yield prospects for much of the center-west are generally favorable in contrast to the south, where conditions have been poor.

Major global trade changes for 2020-’21 include a larger corn export forecast for Zambia, with increases in corn imports for Thailand and Honduras. For 2019-’20, corn exports are raised for Argentina but lowered for Brazil for the local marketing year beginning March 2020 based on observed data through early June. Foreign corn ending stocks for 2020-’21 are lowered from last month, mostly reflecting reductions for China, Argentina, South Africa, and Paraguay that more than offset increases for Brazil and India.