Corn usage for ethanol production during 2010-11 was increased by 50 million bushels to 5.000 billion bushels when compared with the March estimate and is 9.5 percent greater than the 4.568 billion bushels in 2009-10, according to the “World Agricultural Supply and Demand Estimates” report issued today by USDA’s World Agricultural Outlook Board.  The 5.000 billion bushels account for 40.2 percent of the 12.447 billion bushels of corn harvested last fall.  The Board left ending stocks for 2010-11 unchanged at 675 million bushels.  To keep ending stocks from dropping below 5.0 percent of total usage, analysts reduced “feed and residual” usage by 50 million bushels to 5.150 billion bushels.

Strong blender incentives and positive ethanol producer margins continue to encourage expansion of ethanol production and use, the Board explained as the reason for raising its estimate for corn for ethanol.  Also, rising gasoline prices have pulled ethanol prices higher helping to offset increases in corn feedstock costs for ethanol producers, the report noted.

Poultry and hog producers seeking feeding alternatives to costly corn may want to consider wheat, the Board indicated.  Cash and futures prices for soft red winter wheat have recently dropped below those prices for corn on a pound-for-pound basis.  This situation is creating opportunities for wheat to replace higher priced corn in feeding rations, the analysts explained.  Intended Southern corn plantings are the highest since 2007 which means better prospects for early new-crop corn usage ahead of September 1.

In today’s report the Board changed the category “ethanol for fuel” to “ethanol & by-products” and added the following footnote:  “Corn used to produce ethanol and by-products including distillers’ grains, corn gluten feed, corn gluten meal, and corn oil.”  A number of ethanol groups had been urging USDA to clarify that not all of the corn listed as being used for ethanol manufacturing actually has its end use in ethanol.