Record Corn Used for Ethanol Expected in 2009/10

This report summarizes the initial U.S. Department of Agriculture (USDA) supply and demand projections and U.S. price prospects for the 2009/10 marketing year. Because planting of spring crops is still under way in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative.

Projections are based on USDA surveys, economic analysis, judgment, and the assumption of normal weather.

Forecasted feed grain area planted in 2009, based on the March 31 Prospective Plantings, is down 2 percent from 2008. Acres to be planted in corn are expected to be down 1 percent. Total feed grain supplies for 2009/10 are forecast down 1 percent. However, strong domestic use of feed grains, boosted by a 9-percent rise in corn used to make ethanol, is expected to keep feed grains ending stocks very low, down 27 percent from 2008/09.

With plentiful supplies of distillers’ grains from ethanol production in 2009/10, feed and residual use is expected to total 141 million tons for the four feed grains, down from 145 million in 2008/09. Prices are expected to remain strong for all four feed grains but will be down from 2008/09.

World coarse grain production in 2009/10 is projected to be down 1.5 percent from the previous year’s record, but beginning stocks are up more than production is down, leaving global supplies large and slightly increasing. Use is expected to increase and exceed production, trimming projected ending stocks. Several governments, such as those of China, the EU, and Russia, are purchasing and storing grain to support producer prices, so foreign coarse grain stocks are forecast up fractionally while U.S. stocks drop.

World corn trade is expected to expand 5 percent in 2009/10 as improved economic growth boosts demand for meat and increases feed demand. Competition in the corn export market is projected lower, mostly due to reduced production in Ukraine. The combination of slightly reduced competition and increasing world corn trade is projected to boost U.S. 2009/10 corn exports 4.5 million tons to 49.0 million (1.9 billion bushels for September-August).

source: cattlenetwork