October 16, 2008

US feed grain production for 2008/09 is forecasted to be up from 323.5 million tonnes last month at 328.2 million tonnes, while corn production is forecasted at 12.2 billion bushels, up 128 million from last month.

Planted area for the four grains increased 248,072 hectares, and harvested area for grains increased 315,654 hectares this month. Yields per harvested acre for the four grains combined were increased slightly to 3.58 tonnes per acre, compared with 3.56 tonnes last month. Beginning stocks were raised to 45.1 million tonnes. Total 2007/08 feed grain supply is forecast at 376 million tonnes, down from 390.3 million in 2007/08.

Total 2008/09 feed grain utilisation is projected at 342.4 million tonnes, up from 339.9 million last month, but down from 345.2 million in 2007/08. The month-to month increase came from higher feed and residual use for corn and sorghum and a slight increase in sorghum exports. Total feed-grain ending stocks for 2008/09 were raised 3.3 million tonnes to 33.5 million.

On a September-August marketing year basis, feed and residual use for the four feed grains plus feed wheat in 2008/09 is projected to total 148.2 million tonnes, down from 163.8 in 2007/08. Corn is estimated to account for 92 percent of feed and residual use in 2008/09. The projected index of grain-consuming animal units (GCAU) in 2008/09 is down 1.1 million units to 93.8 million. Feed and residual per GCAU is estimated at 1.58 tonnes, down 8.5 percent from 2007/08.

Total use for 2008/09 is projected at 12.7 billion bushels, up 40 million this month. Feed and residual use was raised 150 million bushels this month, due to larger supplies, reduced availability of DDGS, and sharply lower prices. Ethanol production was lowered 100 million bushels to 4 billion as a result of declining gasoline consumption. FSI is down 110 million bushels to 5.3 billion. FSI use is up 23 percent from last year with the 1-billion-bushel year-to-year increase in projected ethanol corn use. Exports in 2008/09 remain unchanged from last month at 2 billion bushels. Ending stocks for 2008/09 were raised this month by 136 million bushels to 1.2 billion.

Prices received by farmers are expected to decrease due to sharp declines in futures and cash prices over the past month, which have dramatically reduced price prospects for corn that was not forward priced. The price forecast was lowered 80 cents on both ends of the range to US$4.20-US$5.20 per bushel.