Offsetting changes in corn use leave 2011/12 carryout unchanged

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While corn demand keeps rising, and growers have responded by planting more acres, not all are created equal. With corn going into less traditional areas and rotational plantings being sacrificed for more corn-on-corn production, yields will more likely fall short of the trendline. Corn supply projections were unchanged this month. Corn use for ethanol in 2011/12 was increased 50 million bushels as fourth-quarter ethanol production is expected to exceed earlier estimates. Weekly reports from the U.S. Department of Energy’s Energy Information indicate ethanol production is not slowing in spite of tight corn supplies and diminished producer margins. At 5,050 million bushels, corn used for ethanol is at a record level. Weekly production, while not reaching the levels achieved late last year, have remained robust, partially due to higher-thanexpected ethanol exports for the year. Declining gasoline consumption because of the economic slowdown and increased vehicle efficiency continue to be drags on ethanol consumption, due to limits on the proportion of ethanol in gasoline. Corn exports are projected 50 million bushels lower this month at 1,650 million as recent sales and shipments have been below expectations and global competition, especially from Brazil, is expected to increase, reducing fourth- quarter expectations for U.S. exports. Feed and residual use for 2011/12 is unchanged from last month's projection.

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With supplies steady at 13,506 million bushels, and total use unchanged at 12,655 million bushels, ending stocks are the same as last month’s projection and remain historically tight at 851 million.

On June 29, NASS will update U.S. corn planted acreage from the farmer planting intentions reported in the March 30 Prospective Plantings report. That same day, NASS will also release its estimate of June 1 feed grain stocks in the quarterly Grain Stocks report. The July Feed report will update feed grain supplies and use accordingly. On August 10, NASS will release its first survey-based forecast of the 2012/13 corn crop in the monthly Crop Production report.

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