Domestic corn use is increased this month by 70 million bushels as demand remains strong in 2010/11 despite record-high corn farm prices. Leading the change is a 50-million-bushel increase in the projection of corn used for ethanol. Food and other industrial use is increased by 20 million bushels. The export projection remains unchanged from last month.
Record-high final Energy Information Administration ethanol output for November and January weekly data indicating continuing increases boosted projected 2010/11 corn for fuel use to 4,950 million bushels. So far this crop year, the returns over operating costs have been positive even though increases in ethanol prices have lagged behind those in corn prices. Recent indications, however, are that ethanolcorn crush margins (as measured using prices from the Chicago Board of Trade) are slipping, but this has yet to translate into slower ethanol production.
Corn used to produce high-fructose corn syrup (HFCS) is projected 15 million bushels higher than last month, reflecting strong shipments of the corn-based sweetener to Mexico. Demand for HFCS has grown in Mexico as sugar exports to the United States have increased. Corn used for starch is also raised 5 million bushels based on strong first quarter use and improving industrial output in the United States.
No changes are made to the supply and use projections for sorghum, barley, or oats.