The latest U.S. Department of Agriculture forecast calls for enough corn and soybeans to meet both food and fuel needs.
The May supply and demand report released on Friday based predictions for the 2008-09 marketing year on an expected corn crop of 12.1 billion bushels, down 7 percent from last year’s record crop.
USDA is expecting total U.S. corn use in 2008-09 to be 2 percent lower than the current marketing year, which ends in August. The report calls for reductions in feed and residual use and exports to more than offset a continued expansion in ethanol production.
Feed and residual use is projected down 14 percent as corn feeding declines with increased production of distillers grains, higher corn prices, and reduced red meat production. Corn exports are projected down 16 percent as U.S. supplies face increased world competition with increased foreign production and a sharp drop in EU-27 imports. Ethanol use is projected at 4 billion bushels, up 33 percent from 2007/08. The slowing pace of plant construction and expansion, and lower capacity utilization are expected to modestly dampen growth in ethanol corn use. With total corn use expected to exceed production by 635 million bushels, ending stocks are projected down 45 percent. At 763 million bushels, ending stocks would be the lowest since 1995/96.
Meanwhile, on the soybean side, production is expected to be up by 520 million bushels this year, but biodiesel production is expected to be only slightly higher in the coming marketing year. USDA is projecting biodiesel will use 15 percent of total soybean oil production in 2008-09, compared with 14 percent this year.