WASDE: Corn use in ethanol forecast down at 5.4 billion bushels

By Erin Voegele | October 10, 2019

The USDA lowered its 2019-’20 forecast for corn use in ethanol by 50 million bushels in its latest World Agricultural Supply and Demand Estimates Report, released Oct. 10. The forecasts for corn production, exports and ending stocks were also reduced.

The USDA currently forecasts 2019’20 corn production at 13.779 billion bushels, down 20 million bushels from its September outlook. The agency said a decline in harvested area more than offsets an increased yield forecast.

Corn supplies are forecast down sharply from last month on a reduced crop and lower beginning stocks based on the USDA’s Sept. 30 Grain Stocks report. Exports are reduced 150 million bushels reflecting smaller supplies and U.S. price competitiveness.

Corn use for ethanol is down 50 million bushels based on weekly production data as reported by the U.S. Energy Information Administration during September. The USDA currently predicts 5.4 billion bushels of corn will go to ethanol production in 2019-’20, compared to an estimated 5.376 billion bushels in 2018-’19 and 5.605 billion bushels in 2017-’18.

Projected feed and residual use is up 125 million bushels based on indicated disappearance during 2018-’19. Corn ending stocks for 2019-’20 are lowered 261 million bushels. The season-average corn price received by producers is raised 20 cents to $3.80 per bushel.

Foreign corn production is forecast mostly lower as an increase for Russia is more than offset by declines for Egypt and Syria. The projected corn yield for Russia is raised based on reported harvest results to data.

Corn exports are raised for Russia, with a more than offsetting decline for the United States. For 2018-’19, corn exports for Brazil are raised for the local marketing year beginning in March 2019 based on record large shipments during the month of September. From July to September Brazil has exported close to 20 million tons of corn, nearly 50 percent above the previous high for the time period, with large shipments to important U.S. markets such as Japan, South Korea, Mexico and Columbia. For 2019-’20, corn imports are lowered for Saudi Arabia, Mexico, Venezuela, Cuba and Bangladesh. Foreign corn ending stocks are higher, mostly reflecting increases for Brazil, Canada, and the EU. Global corn stocks, at 302.6 million, are down 3.7 million from last year.