The US Department of Agriculture sees US corn usage rising from the previous estimates for the 2020-21 marketing year (September-August) on the back of estimated higher exports and more use of corn for ethanol, it said in its World Agricultural Supply and Demand Estimates, or WASDE, report June 10.
Corn exports from the US in 2020-21 are now forecast at 2.85 billion bushels, up 75 million bushels from May estimates, while estimates for corn used for ethanol for 2020-21 is also seen 75 million bushels higher at 5.05 billion bushels, USDA said.
Owing to the increase in exports and ethanol usage, US corn ending stock estimate for 2020-21 is seen dropping by 150 million bushels from May to 1.107 billion bushels, it said.
Corn used for ethanol is raised based on the most recent data during May, which indicated demand is almost back to levels seen prior to COVID-19, USDA said in the report. "Exports are raised based on export inspection data for the month of May that implies continued robust global demand for US corn, despite high prices," it added.
The continuing rebound in ethanol production may push old crop corn demand closer to 5 billion bushels for that segment, S&P Global Platts Analytics said in its WASDE preview report June 10. The pace of corn exports suggests yet another increase for US exports, it added.
Minor changes to 2021-22 estimates
Moving to new crop corn, USDA has lowered the beginning stocks by the same 150 million bushels as the year-end stocks for 2020-21 to 1.07 billion bushels.
Filtering that cut with no other changes to the 2021-22 corn supply demand estimates, the country's year-end stock for 2021-22 is also seen falling by 150 million bushels to 1.357 billion bushels.
Almost every other estimate for 2021-22 has been left unchanged.
"Platts Analytics does not believe the new crop balance sheet will offer anything new except for the carry in. Changes will start in July with an acreage adjustment," it said in the preview report.
Markets are eagerly awaiting the USDA's acreage survey report, to be out June 30 with updated acreage numbers for the 2021-22 marketing year, which will provide a way forward for US corn supply and demand estimates.
Platts Analytics expects the USDA to come up with higher acreage under corn in the upcoming report at 93 million acres. The USDA, as of now, sees US corn acreage for the 2021-22 marketing year at 91.1 million acres, and production to be at 14.99 billion bushels.
Corn futures on the Chicago Board of Trade, or CBOT, gained following the report. The most active July futures contract of corn on the CBOT was seen at $7.05/bu currently, up 15 cents/bu from the previous close.
