For the second month in a row, USDA lowered its forecast of corn use for ethanol over the next year by 100 million bushels.
The agency now forecasts 3.2 billion bushels will be used for ethanol in the marketing year that began Sept. 1, 2007, down from 3.3 billion bushels forecast last month and 3.4 billion bushels forecast in August. Those projections are still well above the estimated 2.1 billion bushels of corn used for ethanol in the year ended August 31, 2007.
The reduced forecast reflects "lower indicated plant capacity utilization and lower returns for ethanol producers due to recent declines in ethanol prices and continued strength in corn prices," USDA said in its October World Supply and Demand report.
USDA raised its season-average farm price forecast for corn in the same period to $2.90 to $3.50 per bushel, up 10 cents on both ends of the range, reflecting continued strong cash prices supported by strong export demand and higher soybean and wheat prices.
In a separate report, USDA left its forecast for the 2007 corn crop virtually unchanged from last month's forecast at 13.3 billion bushels and reduced its soybean crop forecast slightly to about 2.60 billion bushels from 2.62 billion forecast a month ago.
By Janie Gabbett on Monday, October 15, 2007
