September WASDE lowers forecast for 2020-‘21 corn use in ethanol

By Erin Voegele | September 11, 2020

The USDA lowered its forecasts for 2020-’21 corn production and corn use in ethanol in its latest World Agricultural Supply and Demand Estimates report, released Sept. 11.  Corn ending stocks were also revised down, while corn exports were increased.

The agency’s new corn production forecast is for 14.9 billion bushels, down 378 million bushels from its August forecast due a lower yield forecast and reduction in harvested area.

Corn supplies are reduced from August, as a small crop more than offsets greater beginning stocks mostly due to lower estimated exports for 2019-’20.

Corn used for ethanol in 2021-’21 is lowered by 100 million bushels to 5.1 billion based on the continued slow recovery in motor gasoline demand as a result of COVID-19. An estimated 4.855 billion bushels of corn went to ethanol production in 2019-’20, down from 5.378 billion bushels in 2018-’19.

The forecast for corn exports is raised 100 million bushels reflecting reduced supplies in competitor countries. With supply falling more than use, corn ending stocks are lowered 253 million bushels from last month. The corn price is raised 40 cents to $3.50 per bushel.

Globally, European Union corn production is lowered, mostly reflecting a reduction for Romania. Ukraine corn production is down, as acute short-term drought across much of the primary growing areas lowered corn yield prospects after a favorable start to the summer growing season. Corn production is raised for Brazil, as high domestic prices are expected to support an expansion in area. Corn production is also increased for India and Nigeria.

Corn exports are raised for the U.S., Brazil, and Mexico. Corn imports are raised for Venezuela. China’s corn feed and residual use for 2019-’20 and 2020-’21 is raised from last month, based on observed soybean meal equivalent protein consumption and current corn prices. Foreign corn ending stocks are lower relative to last month, as increases for India and Nigeria are more than offset by a decline for China.