Insight Focus
The USDA has forecasted higher corn use for ethanol and exports. Meanwhile, estimated corn ending stocks have declined. The EIA maintained its ethanol production and export projections for 2024-25. The Renewable Fuels Association anticipates higher ethanol exports, especially to Asia.
USDA Increases Corn Use and Exports The USDA has increased its forecast for 2024-25 corn use in ethanol production in its latest World Agricultural Supply and Demand Estimates (WASDE) report, released on December 10.
The monthly WASDE outlook also signalled lower corn ending stocks and larger exports.
The USDA increased its forecast for corn use in ethanol to 5.5 billion bushels, up from last month’s forecast of 5.45 billion bushels. The increase is based on recent data from the agency’s Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the US EIA for the month of November.
The USDA stated that the data suggest corn usage for ethanol during the September to November quarter was the highest since 2017. For the 2023-24 period, corn use for fuel ethanol production reached 5.478 billion bushels, compared to 5.176 billion bushels in 2022-23. The forecast for season-average corn prices was unchanged.
The USDA also increased its corn export outlook by 150 million bushels to 2.5 billion, reflecting the current pace of sales and shipments. With no other changes in usage, corn ending stocks were reduced by 200 million bushels to 1.7 billion. The season-average corn price received by producers remained unchanged at USD 4.10/bushel.
Source: USDA
The WASDE outlook for foreign corn production was revised downward, with expected declines in the EU, Mexico and Indonesia, partly offset by an increase for Ukraine.
EU corn production is down, reflecting reductions in Italy, Romania, Croatia and Austria, which are partially offset by increases in Poland, Spain and France. Mexico’s corn production was reduced due to expectations of a smaller winter corn area.
Source: USDA
The outlook for corn exports for 2024-25 were raised for the US and Canada but lowered for the EU. Corn imports are expected to be higher for Bangladesh, the EU, Iran and Mexico but cut for China.
Foreign corn ending stocks were reduced in the report based on expected declines for China, the EU and Indonesia. Global corn stocks, now at 296.4 million tons, are down 7.7 million.
Ethanol Production Forecast
The EIA has maintained its forecasts for US fuel ethanol production and exports for 2024 and 2025 in its latest Short-Term Energy Outlook, published on December 10. The outlook for ethanol blending in 2024 was revised slightly downward, indicating lower production levels than expected.
The EIA projects that fuel ethanol production will average 1.05 million barrels per day in both 2024 and 2025, up from 1.02 million barrels per day in the previous year. Fuel ethanol production is expected to average 1.07 million barrels per day in the final quarter of 2024.
In 2025, production is forecast to average 1.05 million barrels per day in the first quarter, 1.04 million barrels per day in the second quarter, 1.05 million barrels per day in the third quarter, and 1.07 million barrels per day in the fourth quarter.
Source: EIA
Net US imports of fuel ethanol are expected to average 12,000 barrels per day in both 2024 and 2025, with both forecasts unchanged from November. Net imports averaged 9,000 barrels per day in 2023.
Ethanol Industry Expects Higher Exports
The Renewable Fuels Association (RFA) and other industry groups are looking for higher ethanol exports in 2025, particularly in locations such as Indonesia, Vietnam and India.
“Those countries are looking at going to E15 plans,” said RFA’s Scott Richman. “India already is one of the major destinations for ethanol. India is trying to go over the next couple of years to a 20% ethanol blend. So, there are plenty of opportunities overseas for US ethanol producers.”
