Sorghum prices attract ethanol plants

USDA projected a 40 million-bushel increase in sorghum use in February based on indications of increased sorghum use by ethanol plants in the Southern and Central Plains. Sorghum prices are well below those for corn in these areas and supplies are plentiful with this year’s slower export pace.

USDA’s Feb. 10 World Agricultural Supply and Demand Estimates also reported that ethanol blender and producer margins have recently improved and weekly production of gasoline blends with ethanol has risen. Ending stocks of sorghum were projected 30 million bushels lower.

USDA lowered its estimate for world corn production for 2008-09 by 4.6 million tons due primarily to dryness in Argentina and Brazil.

Projected world corn imports were lowered 2 million tons from last month while global feeding was projected 5.8 million tons lower. Ending stocks for 2008-09 were projected 600,000 tons higher on lower expected global consumption.

Projected U.S. soybean ending stocks for 2008-09 were reduced to 210 million bushels, down 15 million from last month. Soybean exports were raised 50 million bushels to 1.15 billion as export shipments continue to exceed earlier projections, primarily for China.

Estimated global soybean production was reduced 9.1 million tons to 224.1 million tons due to drought in South America. Soybean production for Argentina is projected at 43.8 million tons, down 5.7 million from last month, while production for Brazil is projected at 57 million tons, down 2 million due to dry conditions especially in the southern producing areas.

USDA made no changes to its cotton production estimate, but reduced domestic mill use 7 percent to 3.9 million bales. U.S. exports were reduced 500,000 bales to 11.5 million, due to lower projected foreign imports, especially by China.

Globally, cotton consumption was cut more than 2 percent from last month’s estimate as the world economy continues to perform below previous expectations, resulting in a buildup of textile inventories and idling of spinning capacity. Consumption was reduced in China, Turkey, the United States, Pakistan, Russia, India, Indonesia, and other countries, but is raised in Thailand.

If realized, the forecast year-to-year decline of 8.2 percent would be the largest since 1937-38. With lower consumption, world stocks were raised nearly 4 percent from last month to 61.7 million bales.

Cotton exports were reduced for most of the world’s major suppliers, especially the Central Asian countries, India, and the United States.

USDA did not make changes in U.S. rice supply and use balance. However, rice exports for 2008-09 were lowered 3 million hundredweight to 98 million, all in the long-grain and combined milled-and-brown export categories. The decline in use resulted in an increase in ending stocks to 26.2 million hundredweight, up 13 percent from last month.

USDA increased its estimate of global rice production due to a number of small upward adjustments in the EU-27, Philippines, Russia, and Nicaragua. World exports were lowered because of reductions for India, Thailand, and the United States. Import projections for 2008-09 were lowered for EU-27 and the Philippines. World rice ending stocks for 2008-09 are projected at 84.6 million tons, up nearly 2 million tons from last month, and 5.6 million above 2007-08.

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TAGS: Corn
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