By Jon Scheve, Superior Feed Ingredients, LLC
The last USDA report lowered export demand by 75 million bushels, most likely due to the anticipated large corn crops in South America and Ukraine. Unlike the U.S. though, these countries lack adequate storage, which means their corn is priced to move when it is harvested and it will compete with U.S. supply.
The USDA also reduced the ethanol grind by 25 million. The recent price set-back, could help ethanol plants’ margins and allow for the grind to remain steady going forward.
On a positive note, feed usage wasn’t reduced any further in this report. Some say the long cold winter is causing lower feed efficiency, so some expect feed demand to be adjusted higher down the road. While others in the trade think the much lower wheat prices will encourage end users to replace corn with more wheat in the rations. I’m not sure this will happen though, given wheat’s relatively good carry and strong basis most of the year will keep much of the wheat out of feed.