Feed grain outlook mixed

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The crystal ball outlook for the grain markets in 2001 is somewhat cloudy. Information on corn reserves, production, prices, ethanol and exports released in the USDA’s February Feed Outlook provides a mixed outlook:

  • Forecasts call for U.S. feed grain reserves in 2000/01 to hit 52.7 million metric tons. That’s up 4 percent from a month ago, and up 8 percent when compared to the 1999/2000 marketing year.
  • Monthly ethanol production reports show the amount of corn used to make ethanol in December 2000 set a record high. Analysts expect strong demand for ethanol use, because it helps meet clean air requirements. In addition, 42 companies have signed up to increase ethanol output by 246 million gallons in response to the Bioenergy Program, which provides incentives for increased ethanol production. Total corn used in ethanol production for the 2000/01 marketing year is expected to be up 9 percent from the 566 million bushels used the previous year.
  • The projected price range for corn during the 2000/01 marketing year has been narrowed to $1.70 - $1.90 per bushel.
  • Forecasts predict corn exports for the U.S. at 52 million tons for the 2000/01 marketing year. The corn export forecast was revised down 2.5 million tons from the previous month’s forecast. The forecasted decline is primarily due to increased world competition.

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