USDA raises projected corn use for ethanol in monthly report
USDA raised projected corn use for food, seed and industrial (FSI) use, increasing corn for ethanol by 25 million bushels to 5.35 billion bushels for the 2016-’17 production year. The increase in corn use for ethanol was based on the most recent data from the Grain Crushings and Co-Products Production report, and strong pace of weekly ethanol production during January as indicated by Energy Information Administration data.
Non-ethanol FSI is raised 10 million bushels and corn ending stocks are lowered 35 million bushels from last month, according to the February supply-demand report. That puts projected engding stocks at 2.32 billion bushels. The projected range for the season-average corn price received by producers is narrowed 10 cents on each end to $3.20 to $3.60 per bushel, with the midpoint unchanged at $3.40.
Forecast U.S. sorghum exports are lowered 25 million bushels from last month, reflecting the slow pace of export commitments through January, particularly to China. Offsetting is a projected increase in feed and residual use. Grain sorghum prices are projected to average $2.50 to $2.90 per bushel, down 20 cents at the midpoint to $2.70 reflecting the current weak relationship to corn prices in interior markets.
Global coarse grain production for 2016-’17 is forecast 1.4 million tons higher from last month to 1.33 billion tons. This month’s foreign coarse grain outlook is for increased production, consumption, and trade relative to last month. Mexico corn production is projected to be record high, as government data indicates higher planted area and a lower level of abandonment following a favorable summer growing season. Sorghum production is lowered as producers reduced plantings in favor of corn due to the prevalence of the sugarcane aphid. Ukraine corn production is raised on a forecast record-high yield, based on the latest harvest results to date.
Major global trade changes for 2016-’17 this month include higher projected corn exports for Ukraine and Canada. Corn imports are raised for Iran and Vietnam, while sorghum imports are lowered for China. Forecast 2016-’17 corn feed and residual use for China is raised, reflecting sharply reduced imports of corn substitutes, relatively low internal market prices and efforts by the government to promote use of domestic supplies. Projected FSI use for China is increased as lower prices and government support are expected to boost domestic use and exports of corn-based industrial products. Foreign corn ending stocks are lowered from last month, with reductions for China and the EU only partially offset by increases for Paraguay and Mexico.