Market Analysis
Record weekly US ethanol production and strong live-stock numbers during the first quarter of 2017/18's crop season has likely sparked a record domestic disappearance of corn utilizing a sizable portion of this year's 2nd largest US corn supplies. The combination of expanding US fuel demand and better utilization of higher ethanol blends, particularly 15%, have been behind corn's strong industrial usage. Improving world ethanol exports because of a strong US price advantage vs. Brazil's sugar biofuel also helpful recently. This combination of ethanol and feed demand could produce a record 4.07 billion bu. fall domestic corn demand, a 2.6%.yearly rise.
This month's USDA Grain Crushing report, which updates the US corn demand for America's fuel ethanol along with some other industrial outputs, rose about 51 million bu. from 2016/17's first quarter. Looking at fuel ethanol portion of this industrial demand, this major demand jumped 3.6% over last year or a 48 million bushels to 1.391 billion bu. or 80% of US corn industrial demand.
2017/18's first quarter corn exports have been sharply lower at 343 million bu. because of a rebound in Brazil's safrina (2nd crop) output and Argentina's dropping its export tariffs. This is 205 million bu. fall from last year. However, S American fall dryness reduced a portion of Argentina' first corn plantings and delayed northern Brazilian bean seeding (likely curtailing its safrina corn out-put) which could boost US corn's 2nd half export demand.
