Feed Grain Outlook: Offsetting Changes in Usage Leave Corn Stocks Unchanged

Corn harvest. Photo: Texas A&M AgriLife

Total U.S. corn use is unchanged as 50 million bushels shifts from exports to ethanol. With total supply and use both steady, projected ending stocks remain unchanged at the lowest level since 2015/16. The season average price received by farmers is unchanged at $3.85 per bushel.

The corn exports projections for the United States continue to decline, as expected recent improvements in export sales have been insufficient to reach last month’s forecast, despite an improvement in U.S. price-competitiveness. Corn exports are projected higher for Ukraine, the European Union, and Paraguay with increased demand from Turkey and Brazil. Other changes for corn and other coarse grains are fractional.

Domestic Outlook

Corn Use Shifts From Exports to Ethanol

There is no change in 2019/20 corn supply this month. Total projected supply remains at 15,962 million bushels and use is unchanged at 14,070 million. Corn for ethanol is raised 50 million bushels to 5,425 million on strong crushings in December, reported by the National Agricultural Statistics Service (NASS) Grain Crushings and Co-Products Production report, and strong weekly production in January, reported by the Energy Information Administration’s Weekly Petroleum Status Report. As a result, food, seed, and industrial (FSI) use is projected at 6,820 million bushels.

Projected corn exports are reduced 50 million bushels to 1,725 million bushels on continued strong competition from other corn exporters such as Brazil, Argentina, and Ukraine.

With offsetting changes in use, projected ending stocks remain at 1,892 million bushels, the lowest since 2015/16. The stocks-to-use ratio is unchanged this month at 13.4, compared with 15.5 in 2018/19.

The 2019/20 season average price received by farmers for corn is projected unchanged at $3.85 per bushel, based on weighted average sales to date.

Grain-Consuming Animal Units

Grain-consuming animal units (GCAU) for 2019/20 are projected at 103.1 million units, up 0.3 million from last month. Inventory rose for broilers and layers, but declined for turkeys.

Feed and Residual Use: Four Feed Grains and Wheat

Feed and residual use for the four feed grains (corn, sorghum, barley, and oats) and wheat on a September-August marketing year basis for 2019/20 is projected at 150.5 million tons, with no changes in any categories since last month.

Sorghum FSI Raised

Greater sorghum use for ethanol reported by the NASS Grain Crushings and Co-Products Production report for December push 2019/20 sorghum FSI 5 million bushels higher to 105 million leading to a total use of 245 million bushels. Sorghum for ethanol reached 9.5 million bushels in December 2019, the highest since August.

September through December sorghum used for ethanol totaled 33.1 million bushels, up about 8 percent relative to the same period a year ago. Favorable sorghum/corn price ratios in some areas and improved ethanol production margins prompted a greater sorghum grind.

Ending stocks are projected down 5 million to 40.2 million bushels compared with 63.7 in 2018/19. The season average price received by farmers for 2019/20 is projected at $3.35 per bushel, down 5 cents from last month, based on observed prices to date. The stocks-to-use ratio is 11.0 compared with 18.9 in 2018/19.

Barley Exports Raised, Oats Balance Sheet Unchanged

Strong malting barley exports to Canada, Mexico, and Japan in December edged the 2019/20 export forecast up 1 million bushels to 5 million. Volume in December was the largest since May 2017. As a result, ending stocks were lowered to 88 million bushels, nearly 2 million above last year’s level. Projected price is unchanged.

There were no changes to the oats balance sheet or price this month.

Calendar Year Ethanol Exports

The U.S. Census Bureau reported calendar year ethanol exports of 1.470 million gallons in 2019, 224 million or 13 percent below 2018. Of the 224 million gallon decline, most was attributable to slower shipments to the two largest importers—Brazil, which was down 32 percent, and Canada, which declined 5 percent. Shipments to Brazil slackened due to higher tariffs on U.S. ethanol implemented by Brazil. Through November, the latest data available, exports represent about 9 percent of U.S. ethanol total disappearance.

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