WASDE: Corn unchanged, sorghum for ethanol up

By Susanne Retka Schill | February 04, 2009
Web exclusive posted Feb. 11, 2009, at 4:34 p.m. CST

The USDA made no changes to the U.S. corn balance sheet in its Feb. 10 World Agriculture Supply and Demand Estimates report, although it increased its projections for sorghum use by 40 million bushels, based on indications of increased use by ethanol plants in the southern and central plains. In those areas, sorghum prices are well below those for corn and supplies are plentiful with this year's slower export pace, according to the USDA report. Ethanol blender and producer margins have recently improved and weekly production of gasoline blends with ethanol has risen. While ethanol use projections were up, the USDA lowered the estimates for sorghum feed and residual use by 10 million bushels, leaving projected ending stocks down 30 million bushels.

The projected season-average farm price range for corn was narrowed 10 cents on each end to $3.65 to $4.15 per bushel in this month's WASDE report. The price range for sorghum was narrowed 15 cents on each end to $3.05 to $3.35 per bushel.

Global coarse grain supplies for 2008-09 were lowered 0.9 million tons this month with reductions in corn production for South America and India only partly offset by increases in other coarse grain supplies elsewhere. World corn production for 2008-09 was lowered 4.6 million tons, mostly due to hot, dry weather in South America. Argentina production was lowered 3 million tons as continued drought and heat during late January further reduced prospects for yields and harvested area in key central growing areas. Brazil production was lowered 2 million tons reflecting a return to dryness in late January that limited soil moisture during grain fill in drought-affected southern growing areas. Corn production was also lowered 0.8 million tons in adjacent Paraguay, which experienced similar weather problems this season. In other regions, corn production was lowered 0.5 million tons for India as lower yields more than offset an increase in harvested area. Production was lowered 0.2 million tons for Russia, but increased 1.4 million tons for Ukraine on the latest government indications.

World coarse grain imports and exports for 2008-09 were both lowered in this month's report mostly on lower projected corn trade. World corn imports were lowered 2 million tons with reductions for South Korea, Mexico, Saudi Arabia, Tunisia, Chile and Peru as feed use was projected lowered for most of these countries. Corn feeding was lowered 3 million tons for Brazil, 0.8 million tons for Argentina, and 0.2 million tons for India. Sorghum imports and feeding were raised 0.3 million tons for Mexico, partly offsetting reductions for corn.

Globally, corn feeding was projected down 5.8 million tons this month, and only partly offset by increases in barley and oats feeding. Despite the drop in world corn production in this month's global WASDE figures, ending stocks for 2008-09 were projected 0.6 million tons higher on lower expected global consumption.