WASDE Coarse Grains: Lower U.S. Corn Usage, Increased Stocks

This month’s 2018/19 U.S. corn outlook is for lower corn used for ethanol, reduced exports, and larger stocks. Corn used to produce ethanol is lowered 25 million bushels to 5.550 billion based on the most recent data from the Grain Crushings and Co-Products Production report, and the pace of weekly ethanol production during February as indicated by Energy Information Administration data.

Exports are reduced 75 million bushels to 2.375 billion, reflecting diminished U.S. price competitiveness and expectations of increased exports for Brazil and Argentina. With no other use changes, ending stocks are raised 100 million bushels to 1.835 billion. The season-average corn price received by producers is lowered 5 cents at the midpoint to $3.55 per bushel.

For sorghum, 2018/19 exports are lowered 15 million bushels to 85 million, which if realized would be the lowest since 2012/13. Food, seed, and industrial use is lowered 5 million bushels reflecting a reduction in the projected amount of sorghum used to produce ethanol. Offsetting is a 20 million bushel increase in feed and residual use. The midpoint price forecast is lowered 5 cents to $3.30 per bushel.

The global coarse grain production forecast for 2018/19 is down slightly to 1,371.9 million metric tons. This month’s foreign coarse grain outlook is for marginally lower production, virtually unchanged trade, greater use, and reduced stocks relative to last month. Brazil corn production is unchanged, with increased yield expectations offset by a reduction in area.

Faster-than-normal planting progress improves yield prospects for second-crop corn in the Center-West, while area is down reflecting updated expectations for both first and second-crop corn. Corn production is raised for India, but lowered for South Africa. Australia coarse grain production is higher, as a forecast increase in barley more than offsets a reduction for sorghum.

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Major global trade changes for 2018/19 include higher projected corn exports for Argentina and Ukraine and reduction for the United States. For 2017/18, Brazil’s exports for the marketing year ending February 2019 are raised based on larger than expected late-season shipments. Partly offsetting is a reduction for Argentina.

China’s coarse grain imports for 2018/19 are lowered, reflecting lower forecast sorghum and barley imports. China’s corn feed and residual use is raised with lower sorghum and barley imports. Corn imports are raised for the EU and Canada.

Foreign corn ending stocks for 2018/19 are lowered from last month, mostly reflecting reductions for China, Brazil, and Argentina.

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