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

By Erin Voegele | November 11, 2020

The USDA maintained its 2020-’21 forecast for corn use in ethanol production in its latest World Agricultural Supply and Demand Estimates report, released Nov. 10. The agency lowered its outlook for corn production and ending stocks and increased its forecast for corn prices.

Corn production is forecast at 14.507 billion bushels, down 215 million with a reduction in yield to 175.8 bushels per acre. Corn exports are raised 325 million bushels to 2.65 billion, which if realized would be a record high.

Projected feed and residual use is lowered 75 million bushels based on a smaller crop and higher expected prices. An estimated 5.05 billion bushels of corn is expected to go to ethanol production in 2020-’21, a forecast maintained from the October WASDE. An estimated 4.852 billion bushels of corn went to ethanol production in 2019-’20 and 5.378 billion bushels were used to produce ethanol in 2018-'19.

With supply falling and use increasing, corn ending stocks for 2020-’21 are down 465 million bushels to 1.7 billion, which if realized would be the lowest since 2013-’14. The corn price is raised 40 cents to $4 per bushel.

Foreign corn production is forecast lower with reductions for Ukraine, the European Union, Russia, and Moldova more than offsetting increases for South Africa and Laos. For Ukraine, the projected corn yield is lowered based on continued poor harvest results to date, and if realized, would be the lowest since 2012-’13.

Corn exports are revised up for the U.S., Turkey and South Africa, with mostly offsetting reductions for Ukraine and Russia. Corn imports are raised for China and South Korea, but lowered for the EU, Mexico and Iran. For China, while the National Development and Reform Commission has not made any public statements indicating additional corn import quarter has been allocated, shipment data for exporting countries through early November indicates they will exceed their tariff rate quota level of 7.2 million tons.

Foreign corn ending stocks for 2020-’21 are higher, mostly reflecting increases for China and South Africa that are partly offset by reductions for the EU and Russia. Global corn ending stocks, at 291.4 million tons, are down 9 million from last month.