The USDA’s Economic Research Service predicted in its monthly Situation and Outlook Report that total US corn use this year would be unchanged from last year as 50 million bushels shifts from exports to ethanol production.
With total supply and use steady, projected ending stocks remained unchanged at the lowest level since the 2015/16 marketing year, the report said. The season average price that farmers will receive for their corn was forecast to be unchanged at $3.85 a bushel.
The corn export projections for the US continued to decline as recent gains in export sales have been insufficient to reach last month’s forecast, despite an improvement in US price competitiveness, the report said. Corn exports were projected higher for Ukraine, the EU and Paraguay with increased buying interest from Turkey and Brazil.
CORN USE SHIFTS
There was no change in the 2019/20 corn supply number this month, holding at 15.962 billion bushels, and total use was unchanged at 14.070 billion, the report said.
However, corn used for ethanol could rise 50 million bushels to 5.425 billion, based on strong use in December, reported by the National Agricultural Statistics Service’s 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 use was projected at 6.820 billion bushels, the report said.
Meanwhile, projected corn exports were reduced 50 million bushels to 1.725 billion on continued strong competition from other exporters like Brazil, Argentina and Ukraine, the report said.
With offsetting changes, projected ending stocks remained at 1.892 billion bushels, the lowest since 2015/16, and the stock-to-use ratio remained unchanged from last month at 13.4, compared with 15.5 in 2018/19, the report said.
INTERNATIONAL OUTLOOK
Global coarse grain (of which corn is one) production in 22019/20 was expected to be up fractionally over last month’s projections, the report said. Most of the revisions were in the corn and barley production estimates for South Africa and Morocco.
The estimate of global corn production was revised upward by 0.5 million tonnes to reach 0.8 million while barley production was expected to be up 0.1 million. Changes in other feed grains were considered minor.
South Africa’s corn production estimate was revised upward by 0.5 million tonnes to reach 14.5 million, the report said. Crop conditions there were above average, although planting in the central-east part of their corn belt was delayed by dryness.
In addition, improved genetic varieties in South Africa were expected to add to the corn yield, now expected to reach 5.000 tonnes per hectare, the report said, near the 2016/17 bumper harvest.
Estimates for corn in Ukraine were adjusted upward by 0.3 million tonnes to 35.8 million, based on the latest official preliminary data indicating higher harvested area, although with slightly lower yield.
CATTLE, BEEF RECAP
Cash cattle trading took place in the Plains last week at $118 to $121, mostly $119, per cwt on a live basis, steady to down $2 from the previous week. Dressed-basis trading was at $190 to $191, down $2.
The USDA choice cutout Friday was up $1.64 per cwt at $208.09, while select was up $1.92 at $205.71. The choice/select spread narrowed to $2.38 from $2.66 with 71 loads of fabricated product sold into the spot market.
No live cattle futures contracts were tendered for delivery Friday.
The CME Feeder Cattle index for the seven days ended Thursday was $140.60 per cwt, up $0.08 from the previous day. This compares with Friday’s Mar contract settlement of $138.52, up $2.20.