The US Department of Agriculture on Thursday lowered its estimate for US corn stocks at the end of the 2017-18 marketing year to 2.127 billion bushels (54.029 million mt), down 225 million bushels from its February projection of 2.352 billion bushels.
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This would be 166 million bushels below its estimate for the 2016-2017 marketing year. Each marketing year starts September 1.
The lower ending stocks projection reflected a rise in the estimate for US corn exports to 2.225 million bushels, from 2.050 million bushels expected previously, and a higher estimate for US corn used for ethanol production at 5.575 million bushels, from 5.525 million bushels.
"Exports are raised 175 million bushels to 2.225 billion, reflecting U.S. price competitiveness, record-high outstanding sales, and reduced exports for Argentina," the USDA said.
The estimates of US corn to be used for ethanol production increased based on the most recent data from the Grain Crushings and Co-Products Production report and the pace of weekly ethanol production in February, as indicated by Energy Information Administration data, the USDA added.
The updated estimate foresees 37.6% of the current season's crop going towards production of ethanol and byproducts, while 15% would be exported.
The agency reduced its projection for global corn stocks at the end of the 2017-18 marketing year to 199.17 million mt, which is down 3.92 million mt from its February projection. This would be 32.69 million mt below its estimate for the 2016-2017 marketing year.
The reduction in global year-ending stocks was due to lower production in Brazil and Argentina.
The cut in expectations for Argentina's output is because of persistent heat and dryness during February, while the prediction for Brazil is based on expectations of a more modest increase in second-crop corn, the USDA said.
USDA is projecting a 5-cent rise in its US midpoint season average farm price for the 2017-2018 marketing year to $3.35/bushel, the agency said.
Corn is the primary feedstock for ethanol production in the US and is the main competitor for dried distillers grains.