USDA lowers corn exports, raises ethanol use and ending stocks

USDA lowers corn exports, raises ethanol use and ending stocks

U.S. soy, wheat numbers unchanged in USDA crop report; Argentina soy exports raised

USDA on Wednesday lowered U.S. corn exports by 50 million bushels to 1.75 billion and raised ethanol use by 25 million for net gain to ending stocks of 25 million bushels.

Those were the most notable changes to U.S. crops in the monthly report, with soybean and wheat numbers unchanged and soybean ending stocks staying at 465 million bushel and wheat at 911 million.

The drop in corn exports reflected the slower pace so far this year and to "higher projected exports for Brazil and Canada," it said.

The increase in ethanol use for corn was based on "the stronger-than-expected pace of ethanol production during November," USDA said.

USDA raises corn stocks 25 million bushels

"I anticipated the most likely place for adjustments was in corn. USDA raised its forecast of usage for ethanol but that was more than offset by slow exports, adding 25 million bushels to carryout," said Bryce Knorr, Farm Futures senior grain market analyst.

In a separate report earlier on Wednesday, the Energy Information Administration raised weekly ethanol production by 37,000 barrels per day to 993,000 and lowered stocks by 168,000 barrels.

"This morning's ethanol production number was strong for corn, keeping year to date production levels up around 3.4%," said Knorr. "Cheap gasoline is encouraging more driving, which in turn stimulates demand for ethanol to blend."

.In the world markets, USDA on Wednesday raised Argentina's soybean and wheat exports on ideas the new government there will reduce export restrictions. Argentina's soybean exports went to 11.25 million metric tons from November's 10.75 million and wheat exports went to 6 million from 5 million.

"With soybean exports starting to show some softness, South American weather remains the last, best hope for a rally into early 2016. Parts of Mato Grosso in Brazil's key center-west growing region have seen less than normal precipitation. But so far the crop appears to getting enough to get by," said Knorr.

In the U.S. futures markets, corn and soybeans futures turned lower after the report.

Wheat futures had little reaction with March soft red winter about 7 cents higher near midday, March hard red winter 6 cents higher and March spring wheat 2 cents higher.

"The dollar and outside markets continue to have a big impact on crop prices, which was demonstrated again today in wheat. Look for volatility in the week ahead, with the Federal Reserve expected to raise interest rates 25 basis points on Wednesday," said Knorr.

Dowload the full USDA crop report on the USDA website.

USDA raises corn stocks 25 million bushels

USDA raises corn stocks 25 million bushels

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