LUBBOCK, TX – Corn demand remains relatively strong despite a larger U.S. supply outlook that has pressured futures prices during harvest.
Texas A&M AgriLife Extension grain marketing economist Mark Welch says several major demand categories continue providing support. Heavier cattle weights and longer feeding periods are increasing feed consumption per animal even as cattle numbers remain relatively tight.
Ethanol demand is also holding steady despite a longer-term decline in U.S. gasoline consumption. Welch says higher ethanol blending rates and strong ethanol exports are helping maintain corn use through the renewable fuels sector.
Corn exports remain another bright spot. Current projections are below last year’s pace but would still represent the second-highest U.S. corn export total on record.
The stronger demand picture is competing with larger supplies after September grain stocks exceeded expectations and USDA raised its October yield estimate. Welch says those changes effectively added significant supply to the corn balance sheet within a matter of days.
Farm-Level Takeaway: Solid feed, ethanol and export demand is helping absorb a larger corn crop but has not yet been enough to overcome increased supply pressure.