While optimists hoped the increased demand for ethanol would help drive corn prices, the USDA reports say it won’t be enough to off-set other factors.  Demand estimates are lower by 24 million bushels of corn, and ending stocks are higher by 25 million bushels.  Production estimates remain unchanged from March.

“U.S. corn farmers have indicated their intention to grow another bountiful crop in 2016 and, if the weather proves favorable, we may see a large corn supply after harvest,” said National Corn Growers Association President Chip Bowling, a farmer from Maryland. “At NCGA, we work to apply the same expertise and and dedication shown by our members to our efforts to create and grow demand for our crop. America’s farmers sustainably produce a corn crop that can feed and fuel the world. Working together, we can create the opportunities necessary to maximize the potential of this great resource and build a solid future for our farm families as well.”

Ending stocks are now expected to reach 1.86 billion bushels, their highest level since 2005. The May report will include USDA’s first projection for the 2016-2017 corn crop.

Feed and residual demand estimates were lowered by 50 million bushels reflecting indicated disappearance through the first half of the marketing year. An increase of 25 million bushels to projected demand for ethanol use, which was based upon information from the Energy Information Administration, slightly offset the impact on overall demand.

The 2015-16 season average corn price is projected to be ten cents lower at the top end, with farmers receiving between $3.40 to $3.70 per bushel.  You can read the full report here.