Higher Ending Stocks Projected for Corn
Posted: December 11, 2008
The latest World Agricultural Supply and Demand Estimate (WASDE) from USDA is projecting a higher carryout for corn this year due to smaller than expected usage for ethanol and exports.
Projected U.S. feed grain ending stocks for 2008/09 are raised this month with increases for corn, barley, and oats. Corn use is projected lower with increased feed and residual use more than offset by reductions in ethanol use and exports. Ethanol use is projected 300 million bushels lower this month as prospects for blending above federally mandated levels decline. Financial problems for ethanol producers are reducing plant capacity utilization for existing plants and delaying plant openings for those facilities still under construction. Falling gasoline prices have also resulted in high relative prices for ethanol, reducing blender incentives. Despite reductions in expected meat production, corn feed and residual use are raised 50 million bushels as lower ethanol production reduces the availability of distiller grains. Corn exports are projected 100 million bushels lower reflecting strong competition from larger foreign grain supplies and the slow pace of sales to date. Projected ending stocks are raised 350 million bushels. The season-average farm price is projected at $3.65 to $4.35 per bushel, down on both ends of the range from last month’s $4.00 to $4.80 per bushel.
There is no update for corn production from USDA this month, which remains at 12 billion bushels.