Usage The total U.S. corn domestic use for MY11/12P, while about 7% greater than in MY07/08, is expected to be 1.8% lower than in MY10/11, primarily because of lower expected overall feed grain use.
Projected Feed Use Reflects:
- Record hog and cattle prices accompanied by large initial feedlot inventories supporting feed demand.
- However, reduced broiler production and prospects for fewer cattle going on feed in 2012 indicating weaker feed demand.
USDA is expecting high fructose corn syrup (HFCS) demand for MY11/12 to remain about the same as MY10/11. This demand outlook is accompanied by higher HFCS prices due to higher input costs.
While U.S. ethanol production has experienced growth over the past few years, corn use for ethanol production in MY11/12 is expected to remain flat. This is in part due to the blender tax credit expiring December 31, 2011, and the expectation that it will not be renewed. The 15% ethanol blend that will become broadly available in 2013 could boost corn alcohol use for biofuel production in the future.
U.S. exports for MY11/12 are projected to be weaker than in MY10/11. This is partially because of increased competition from Argentina and Ukraine for corn and from feed quality wheat. In addition, concerns about world economic and financial conditions and strong U.S. corn prices are dampening export demand for U.S. corn.
MY11/12 is projected to close with historically tight U.S. ending stocks of around 21.5 mmt as reductions in supply exceed reductions in use.
- Corn production outside the U.S. during MY11/12 is expected to be larger than the previous marketing year.
- Sources of higher global production include more corn acres in Argentina, higher production in China stemming from both increased area and yields, and increased production in the Black Sea area of the EU-27.
- Mexico is expected to have a smaller corn supply due to adverse planting and growing season weather conditions.
- Exports from Argentina and the EU-27 are expected to be higher in MY11/12.
- Global demand is expected to remain strong due to expanding meat production in many countries.
- China continues to import corn due to strong demand for industrial and feeding use and to maintain stocks.