 "Domestic feed and residual use of corn reached record levels
near 6.2 billion bushels in 2004-05 and 2005-06," said Darrel
Good. "Increased feeding of co-product feed from ethanol
production has been substituting for corn feeding recently, but
the apparent feed and residual use of corn during the 2006-07
marketing year was surprisingly small."The
larger-than-expected estimate of Sept. 1 corn inventories
resulted in a calculation of 2006-07 feed and residual use of
corn of only 5.6 billion bushels. There is some chance that the
size of the 2006 corn crop was underestimated, resulting in an
underestimate of feed and residual use of corn."
Good added that the USDA will release its final estimate of
the size of the 2006 crop in the second week of January 2008.
"The small estimate of feed and residual use for 2006-07
resulted in a reduction in the forecast for 2007-08," he said.
"Feed and residual use for the current year is forecast at 5.7
billion bushels, reflecting a continued expansion in hog
numbers."
Good's comments came as he reviewed corn exports. The USDA
now expects a slower rate of increase in the use of ethanol for
corn production than was forecast last month, but expects larger
U.S. exports. Exports for the 2007-08 marketing year that began
on Sept. 1 are forecast at 2.35 billion bushels.
Marketing year corn exports have exceeded the projected level
for 2007-08 only three times, he noted. Exports totaled 2.367
billion bushels in 1989-90, 2.391 billion in 1980-81 and 2.402
billion in 1979-80.
"The forecast is 10.6 percent larger than exports during the
2006-07 marketing year," he said. "The large projection results
from a smaller supply of feed grains in the rest of the world, a
second consecutive small wheat crop in the rest of the world,
and very large export sales early in the year.
"Through the first six weeks of the marketing year, exports
of U.S. corn are running slightly behind the pace of a year ago,
but unshipped sales are extremely large."
For the latest reporting week, the USDA indicated that 727
million bushels of corn had been sold for export but not yet
shipped.
"At the same time last year, outstanding sales totaled only
429 million bushels," Good noted. "The largest year-over-year
increases in U.S. export commitments are to South Korea, Mexico
and Japan."
The USDA now forecasts 2007-08 total coarse grain production
outside the United States at 696 million tons, 8.5 million less
than the September forecast and 4 million less than 2006-07
production. The second consecutive large corn crops in Argentina
and Brazil are expected to result in large exports from those
two countries. However, combined exports are projected at 945
million bushels, 50 million less than exported in 2006-07.
[to top of second column] |
Chinese corn exports are projected at only 59 million bushels, half
of the September forecast and only about 30 percent as large as
exports in 2006-07, Good added.
"Corn used for ethanol production totaled 2.115 billion bushels
in the 2006-07 marketing year and is now forecast at 3.2 billion
bushels during the current year," he said. "The forecast is 100
million less than the September forecast and 200 million less than
the August forecast. The USDA points to lower returns for ethanol
producers as the reason for the smaller forecast."
Use of corn for all purposes during the 2007-08 marketing year is
forecast at 12.64 billion bushels, 1.42 billion more than used last
year but 150 million less than forecast last month. On the
production side, the USDA forecasts the 2007 harvest at 13.318
billion bushels, about unchanged from the September forecast. The
forecast of harvested acreage was increased by 653,000 (reflecting a
728,000 increase in the estimate of planted acreage), and the
forecast of the U.S. average yield was reduced by 1.1 bushels to
154.7 bushels.
"Stocks of U.S. corn at the end of the current marketing year are
forecast near 2 billion bushels," Good said. "Stocks at that level
suggest that an increase in U.S. corn acreage may not be needed in
2008. Some decline in corn prices following the large projection of
year-ending stocks would not have been surprising, but prices
actually increased."
There may be some concern that the 2007 crop forecast could be
lowered again in November, he noted.
"Since 1975, there have been two other years, 1990 and 2006, when
the U.S. average yield forecast increased in September and then
declined in October, as occurred this year," he said. "In both of
those years, the yield forecast declined in November and the final
estimate in January was below the November forecast. The decline
from October to January was 1.5 percent in 1990 and 2.9 percent in
2006.
"Declines of that magnitude this year would total 2.3 and 4.5
bushels, respectively, or about 200 to 400 million bushels."
[Text from file received
from the University
of Illinois College of Agricultural, Consumer and Environmental
Sciences]
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