January 13, 2009
USDA again lowers forecast for corn usage for ethanol
The US Department of Agriculture on Monday (January 12) again lowered its forecast for corn usage by the US ethanol industry, dropping the 2008-09 marketing year forecast to 3.6 billion bushels.
In December, the USDA cut its ethanol corn-usage forecast to 3.7 billion from 4 billion.
"Ethanol corn use is lowered 100 million bushels as sustained negative ethanol production margins since early December have reduced incentives for ethanol output," the USDA said in its January World Agricultural Supply and Demand Estimates report.
In the report, the USDA also raised its forecasts for corn production and ending stocks for the 2008-09 marketing year. Production is now expected to reach 12.101 billion bushels, up from the December forecast of 12.02 billion and the ending stocks prediction is now raised to 1.79 billion bushels, up from 1.474 billion.
With higher-than-expected corn production and ending stocks forecasts and lower-than-expected ethanol usage, the USDA said the average farm gate corn price will be lower.
"The projected season-average farm price for corn is lowered 10 cents on each end of the range to US$3.55 to US$4.25 per bushel," the USDA said. The expected price range just a month ago was US$3.65 to US$4.35 per bushel.
