WASDE: Corn stocks increase, feed use down, ethanol use up

By Susanne Retka Schill | April 10, 2013

Following a surprising Grain Stocks report at the end of March, the USDA released its monthly World Agriculture Supply and Demand Estimates April 10 making a corresponding upward adjustment in feed grain ending stocks for 2012-’13. The increase in corn stocks more than offset reductions for sorghum, barley and oats. For the first time in months, the monthly WASDE report also adjusted projected ethanol use for the marketing year, increasing it to 4.55 billion bushels from 4.5 billion projected previously.

The April WASDE report lowered corn feed and residual disappearance 150 million bushels reflecting indicated disappearance for the first half (September-February) of the marketing year. The reduction in corn feed and residual use is partly offset by a combined 20-million-bushel increase in projected feed and residual use for the other feed grains based on the March 1 stocks. Adding to 2012-’13 feed grain supplies this month are increases of 3 million bushels and 2 million bushels, respectively, in projected barley and sorghum imports.

Domestic corn use for 2012-’13 is projected 100 million bushels lower as a 50-million-bushel increase in corn used to produce ethanol partly offsets the lower projection for feed and residual disappearance. Larger-than-expected March 1 corn supplies, lower corn prices, and favorable margins for producing and blending ethanol limit the expected year-to-year decline in ethanol production during the second half of the marketing year (March-August). Corn exports for 2012-’13 are projected 25 million bushels lower reflecting the continued sluggish pace of sales and shipments and additional competition from Brazil and Ukraine. Projected U.S. corn ending stocks for 2012-’13 are raised 125 million bushels. 

The projected ranges for the season-average corn and sorghum farm prices are lowered 20 cents at their midpoints to $6.65 to $7.15 per bushel and $6.60 to $7.10 per bushel, respectively.

Global coarse grain supplies for 2012-’13 are projected higher with a 1.1-million-ton increase in world coarse grain production. Corn production is raised 1.5 million tons for Brazil as continued favorable growing season weather boosts prospects for production to a record 74.0 million tons. EU-27 corn production is raised 1.4 million tons with upward revisions to production in Spain, Hungary and Poland. Corn production is also increased 0.2 million tons for Russia on the final government estimate. Partly offsetting these increases are reductions in corn output for South Africa, Vietnam and Serbia. South Africa production is lowered 0.5 million tons as more heat and dryness in March further trim yield prospects.

Global coarse grain trade for 2012-’13 is raised slightly as a small reduction in world corn exports are more than offset by increases for EU-27 barley and India sorghum. Corn exports are lowered 0.6 million tons for the United States and 0.5 million tons for South Africa, but exports are raised 0.5 million tons each for Brazil and Ukraine. Global corn feed and residual use is down 5.3 million tons with much of the decline reflecting the reduction in the United States. Feed and residual use is also lowered for China, Egypt, Mexico and Serbia. A 1.5-million-ton increase in EU-27 corn feed and residual use is partly offsetting. Global corn stocks are raised 7.8 million tons with 3.2-million-ton increases for both the United States and China, and a 0.9-million-ton increase for Brazil.