WASDE: Corn ending stocks up some, big changes to sorghum use

By Susanne Retka Schill | April 09, 2015

Sorghum supply and demand adjustments took the stage away from corn in this month’s USDA World Agriculture Supply and Demand report.

Significant changes to the sorghum balance sheet reflect the continuing strong demand from China. For one, sorghum use for ethanol dropped to zero in February, as revealed by the Grain Crushings and Co-Products Production report. Ethanol use of sorghum is lowered 16 million bushels in the April report. Total food, seed and industrial (FSI) use is now projected at 14 million bushels, compared to the March report’s 30 million bushel projection and last year’s estimated 70 million bushels. Feed and residual sorghum use is projected 25 million bushels lower and projected exports raised 50 million bushels. Projected The season-average sorghum farm price is projected at $3.85 to $4.15 per bushel, up 10 cents at the midpoint of the range and 30 cents higher than the corn farm price.

The April report went on to explain that the Prospective Plantings report indicates Texas producers intend to increase sorghum plantings by 20 percent for 2015. Last year, more than 80 percent of the Texas sorghum crop was mature by mid-August. These additional supplies, exported before the Sept. 1 start of the new marketing year, will help meet current demand.

Despite the big changes to sorghum projections, few changes are made to corn in the April WASDE report. Projected corn ending stocks are higher by 50 million bushels with a reduction in expected feed and residual use reflecting December-February disappearance as indicated by March 1 stocks. Projected ethanol use for ethanol remained unchanged from the March report at 5.2 billion bushels, just slightly less than the 5.25 billion bushels projected for feed and residual use. The projected range for the corn season-average farm price is narrowed 5 cents on each end to $3.55 to $3.85 per bushel.

In its global assessment, USDA raised corn production estimates for Serbia, Mexico and Argentina by 900,000 tons, 800,000 tons and 500,000 tons respectively. In Serbia, heavy fall rains delayed harvest and the final tally for that crop. Production is raised for Mexico reflecting the latest government statistics for the crop grown last summer. Increased area, exceptional winter rains and plentiful supplies of irrigation water support prospects for the winter crop that was planted in the final months of 2014. The increase for Argentina is based on early harvest results that suggest very good yields in early planted corn and abundant soil moisture for the later planted corn now in grain fill. In addition to last month’s reduction of 2 million tons, the South Africa corn crop is lowered an additional 200,000 tons based on further analysis of weather and satellite imagery.

Global coarse grain consumption for 2014-‘15 is raised slightly, mostly on higher sorghum and millet food use for Sudan. China sorghum feed use is also raised, up 1.5 million tons with higher expected sorghum imports from the United States. Indonesia corn feeding is raised 400,000 tons, more than offsetting a decrease in FSI use. Lower domestic use of corn, sorghum and barley in the United States offset much of these increases.

Global corn trade is raised for 2014-‘15 with imports higher for Indonesia, China, Iran, Algeria, Peru, and Colombia. Partly offsetting is a reduction in imports for Mexico with the larger crop. Corn exports are raised for Argentina and Serbia, but lowered for South Africa. Global coarse grain ending stocks are higher with corn stocks projected up 3.2 million tons mostly on increases for the United States, Indonesia, and China.