What is in this article?:
- Corn consumption continues to exceed projections
- Exports sold but not yet shipped
- Based on current and expected consumption rates, it appears that corn consumption during the current marketing year could exceed the most recent USDA projection.
The USDA’s WASDE report released on April 9 projected corn stocks at the end of the current marketing year at 1.331 billion bushels. The projection of year ending stocks has declined for five consecutive months and is now 556 million bushels smaller than the November 2013 projection.
Compared to consumption projections made in November, current projections are 100 million bushels larger for corn used for ethanol production, 350 million bushels larger for exports, and 100 million bushels larger for feed and residual use. There have been minor changes in the estimate of stocks at the beginning of the marketing year, the projection of imports, and the projection of other domestic consumption.
Based on current and expected consumption rates, it appears that corn consumption during the current marketing year could exceed the most recent USDA projection. Even if higher rates are confirmed over the next four months, the magnitude of year ending stocks will remain a mystery until the September 1 Grain Stocks report is released on September 30. The magnitude of those stocks will take on a little more importance due to the projected decline in corn acreage this year and what appears will be a slow start to the planting season.
With about 4.5 months left in the marketing year, there is opportunity for the consumption projections to change again. In the case of ethanol use of corn, the USDA projects consumption during the current marketing year at 5.0 billion bushels. That projection is 352 million bushels, or 7.6 percent, larger than consumption in the previous year and equal to consumption in the 2011-12 marketing year.
Based on monthly U.S. Energy Information Agency estimates of ethanol production for September 2013 through January 2014 and weekly estimates for February and March, ethanol production in the first seven months of the marketing year was 11.7 percent larger than production during the same period last year. That comparison is a little misleading since year-over-year production was down sharply in the first half of the 2012-13 marketing year and near the previous year’s level in the last half.
Still, to reach the USDA projection of corn used for ethanol production this year, ethanol production during the last five months of the corn marketing year needs to be only two percent larger than production in the same period last year. With a slight increase in domestic ethanol consumption, an improvement in domestic rail logistics, and a continued positive trade balance, it appears that ethanol production (and therefore corn consumption) could exceed the current projection.