-March corn for ethanol usage consistent with USDA annual target pace
USDA reported 454.9 million bushels of corn were used for ethanol production in March vs 406.1 million in February and 420.4 million bushels last year March, but below October-January usage of 463.5-477.9 million bushels/month. Record corn for ethanol usage in March was 472.9 million bushels in 2018. March data brings 2021/22 marketing year-to-date usage to 3.144 billion bushels, 9.6% larger than last year’s 2.869 billion bushels, which featured rather weak production rates during the first half of the year, with a massive decline in February given the historic ice storm across the country’s midsection. Ethanol production ran at much more respectable levels during the second half of the corn marketing last year, though. Accordingly, based on the USDA’s current 5.375 billion bushel annual corn for ethanol usage estimate, April-August usage would need to total 2.231 billion bushels, up 3.1% (67 million bushels) from last year’s 2.164 billion. For reference, over the most-recent 4-week period, U.S. ethanol production averaged 2.8% above year ago levels at 977k barrels/day vs the 1.044 million barrels/day we now estimate ethanol production will need to average through the end of August to reach the USDA’s annual corn demand target taking today’s release of official March data into account. Based on preliminary March ethanol production assumptions (official EIA data not yet published), we estimate the ethanol/corn yield for the month was around 2.92-2.93 gallons/bushel vs 2.91 in February and the 2021/22 corn marketing year-to-date average so far of 2.90. We would not be surprised to see that tick down slightly when all official data is available as that has been the pattern in recent months with slight revisions being made to monthly corn for ethanol usage and EIA ethanol production numbers post-initial data assessments. USDA reported 1.877 million tons of DDGS were produced in March vs 1.693 million tons in February and 1.803 million tons last year March, bringing corn marketing year to date DDGS production to 13.28 million tons vs 12.11 million tons last year during the same period.