Corn Ending Stocks Down, Higher Use

U.S. feed grain ending stocks for 2009/10 are projected lower this month with higher expected corn use and sorghum exports. Corn used for ethanol is projected 100 million bushels higher reflecting the latest ethanol production data from the Energy Information Agency. November's record ethanol production was up 3 percent from the previous record in October as higher prices for ethanol and distillers grains boosted ethanol producer returns.

November-December corn use for ethanol was up 16 percent from the same period in 2008/09. Although returns have declined since November, recently lower corn prices continue to support profitability for ethanol producers.

A 5-million-bushel reduction in expected corn use for sweeteners partly offsets the increase for ethanol. Corn exports for 2009/10 are projected 50 million bushels lower on increased competition from Argentina. Ending stocks are projected 45 million bushels lower. The projected marketing-year average farm price for corn is narrowed 5 cents on both ends of the range to $3.45 to $3.95 per bushel.

Global coarse grain production for 2009/10 is projected 1.6 million tons higher this month with higher Argentina corn production only partly offset by lower EU-27 corn production and lower Ukraine barley and oats production. Argentina corn production is raised 2.2 million tons with higher expected yields and harvested area as growing conditions continue to improve with additional rainfall in the main corn areas. Late planting and short-term heat stress in the western growing areas temper prospects as a substantial portion of the growing season is still ahead. EU-27 corn production is lowered 0.4 million tons on downward revisions to area for Italy.

Ukraine barley and oats production are each lowered 0.2 million tons reflecting the latest revisions to state statistical committee estimates. A number of small, offsetting revisions are made for Russia coarse grains production. Global coarse grain imports and exports for 2009/10 are both raised slightly this month.

The reduction in U.S. corn exports is more than offset by a 1.5-million-ton increase for Argentina. Sorghum imports are raised for Japan and Mexico with the increase in U.S. sorghum exports. Other major trade changes this month include a 0.5-million-ton reduction in EU-27 barley exports and a 0.5-million-ton increase in Turkey barley exports. Global coarse grain consumption is increased 3.4 million tons this month with higher corn and sorghum use more than offsetting a reduction for barley.

Higher corn use for ethanol in the United States and higher corn feeding in Argentina account for most of the increase. Sorghum feeding is raised for Australia, Japan, and Mexico. Barley feeding is lowered for Australia, Iran, Turkey, and Ukraine. Global coarse grain ending stocks are projected 1.0 million tons lower with a 2.1-million-ton reduction for corn partly offset by a 1.1-million-ton increase for barley.

source: cattlenetwork