11 March 2009 19:19 [Source: ICIS news]
HOUSTON (ICIS news)--The US Department of Agriculture (USDA) on Wednesday lowered its US corn stock projection for the end of the 2008-09 crop year by 50m bushels, citing higher ethanol demand for the grain.
The government said US ethanol demand for corn would hit 3.7bn bushels in 2008-09. That forecast is up from 3.6bn bushels as projected a month ago.
The USDA attributed the increase to improving ethanol blender incentives because of higher US gasoline prices since February.
“A continuing recovery in weekly production of gasoline blends with ethanol is also supportive of ethanol demand as are the latest data on ethanol production, imports and stocks,” the USDA said.
The increase in projected ethanol demand for corn partly offset a reduction in the projection of US corn exports, the government said.
The US will likely export 1.70bn bushels of corn in 2008-09, the USDA said, citing pressure from increased foreign supplies of corn and wheat.
That forecast compares with a previous 1.75bn bushels projection in February.
US corn stocks for the end of the 2008-09 crop year are now expected to total 1.74bn bushels, the USDA said.
The projection is down from a 1.79bn bushels forecast in February.
The government increased its corn average price projection for 2008-09 to $3.90-4.30/bushel from $3.65-4.15/bushel in February.
“Continued strength in prices received by producers indicates higher-than-expected forward contracting as farmers took advantage of pricing opportunities last spring and summer,” the USDA said.
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