May 12, 2008
 

Lower ethanol usage to boost US corn ending stocks for 2007-08

 

 

The USDA last week raised US corn ending stocks slightly due to decreased usage from ethanol plants.

 

The USDA estimated 2007-08 ending stocks at 1.383 billion bushels, up from the 1.283 billion estimated in April due to a 100-million bushel decrease in use for ethanol.

 

"The government really had to stretch these numbers on corn to make it work, to keep us above pipeline minimum. We're at contract highs. What that really signals is we have to ration," said Don Roose, president of US Commodities in West Des Moines Iowa.

 

The USDA left its estimate of 2007-08 corn production for Argentina unchanged at 21.5 million tonnes, while raising its estimate of South Africa's corn crop by 500,000 tonnes to 11.5 million tonnes.

 

Corn supplies for 2008-09 are expected to fall from its 2007-08 record with the small increase in carry-in overwhelmed by the projected 949-million-bushel reduction in output.

 

The government projects a crop size of 12.1 billion bushels.

 

US ending stocks for 2008-09 were estimated at 763 million bushels.

 

The yield is projected at 153.9 bushels per acre, 1 bushel per acre below the 17-year average due to the slower than average planting.

 

The projected yield assumes a mid-May planting progress near the 10-year average and reflective of last year's May planting pace.

 

The smaller crop is likely to be met with increased ethanol usage next year.

 

Corn used for ethanol is expected to increase to 4.0 billion bushels in 2008-09, up from 3.0 billion in 2007-08.