U.S. corn demand is off to a strong start so far in 2024/25, with export sales and corn-for-ethanol use running ahead of the pace needed to reach USDA’s marketing year forecasts. The question now is whether that will continue. Assuming corn prices stay relatively low, that will depend heavily on export competition from South America and on how Trump Administration trade and renewable fuels policies impact demand. Let’s take a look at the demand numbers so far.
U.S. corn export sales for 2024/25 through Nov. 28 were a strong 32.8% ahead of a year earlier, while actual export shipments were up 30.7%. Both sales and shipments are comfortably ahead of the seasonal pace needed to reach USDA’s 2024/25 export forecast of 2.325 billion bushels. Based on the five-year average, export sales are currently on pace to reach 2.692 billion bushels. Will sales reach that level? Not likely, at least not without a big shift in Chinese demand. While buying of U.S. corn by other top customers and the rest of the world is up strongly from last year, China has remained virtually absent from the U.S. market. We still expect China to buy more U.S. corn at some point this year, but its imports may not exceed last year’s 117.1 million bushels, which were down sharply from 2022/23, falling for a third straight year. U.S. corn exports do seem likely to exceed USDA’s current forecast, but sales should slow during the second half of 2024/25 due to South American competition.
Corn-for-ethanol use in September-October totaled 907.8 million bushels, up 1.8% from a year earlier and the highest since 2017/18, according to USDA data. Use was ahead of the seasonal pace needed to reach USDA’s 2024/25 forecast of 5.450 billion bushels, which is down 28 million from last year. Use, though, has not been quite as strong as we had anticipated based on ethanol production. The implied corn-to-ethanol conversion rate jumped during October and was about 2.8% higher than a year earlier. The conversion rate has been trending steadily higher over the past 10 years. November ethanol production was strong, though, based on preliminary data. We estimate November corn-for-ethanol use was about 474 million bushels, up 3.8% from last year.
The third major sector of demand for corn, feed/residual use, remains difficult to get a handle on since USDA does not survey feed use. Feed use is dependent on corn supplies and prices, and U.S. livestock numbers. This year, corn supplies are ample, and the expected average price is the lowest in five years, which should support large use. Larger supplies and lower corn prices already led to a 6.2% rise in feed use in 2023/24, though, and we do not anticipate a further increase this year. The number of grain-consuming animal units is up just marginally from last year.
