USDA raises estimate of corn use, lowers price forecast

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The USDA boosted its estimate for domestic corn use 2013-2014 corn use by 100 million bushels in this month’s Feed Outlook report, based on projected increases in ethanol production and grain exports for the new crop.

The Department now projects corn exports for the 2013-2014 crop year at 1.5 billion bushels, up 50 million bushels from last-month’s estimate, based on year-to-date sales. With the 2013 crop estimated at just under 14 billion bushels, more competitive prices have boosted U.S. market share of corn trade to 33 percent, compared with 18 percent in 2012-2013.

USDA also raised its forecast of new-crop corn use for ethanol production by about the same amount, based on strengthening U.S. ethanol prices and production during October and November.

Estimates for feed and residual use are unchanged from last month, but the 100-million-bushel increase in total corn use and five-million-bushel increase in imports results in a 95-million-bushel decrease in ending stocks. However, ending stocks estimated at 1.8 billion bushels are more than double last year’s estimate of 824 million.

The December report lowers the forecast U.S. corn price received by farmers for 2013-2014 by $0.05 on the low end of the range and $0.15 on the high end to a range of $4.05 to $4.75 per bushel. This puts the midpoint of the range at $4.40 per bushel, compared with a 2012-2013 season-average price received by farmers of $6.89 per bushel.

Read the full Feed Outlook report from USDA.

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