US grain crushing shows increase in corn use as alcohol demand picks up


A 2% increase in corn consumed for alcohol provided yet further supportive news to the corn complex Thursday, as the USDA’s grain crushing and co-product production report revealed 538 million bushels were crushed in December.

The figure was a 2% increase on the November data, and a 2% increase versus the December 2016 data.

While corn demand for alcohol increased, co-products fared less well with wet and dry DDGS production falling versus the December 2016 data.

Dry mill production of DDGS reached 1.97 million mt, a fall of 6% versus the same period in 2016, while wet mill DDGS production fell 9% versus December 2016.

Corn oil production – which recently nudged out yellow grease as the second most used feedstock in US biodiesel production – was broadly unchanged versus November’s production and up 30,000 mt on December 2016’s figures at 174,106 mt.

With US corn prices under pressure in recent months, evidence has mounted of the myriad outlets that corn and corn co-products are currently finding.

Corn, ethanol and DDGS have all seen export demand pick up as the US prices competitively, with the demand looking to alleviate some of the pressure that has followed a heavy supply situation.

“Corn seems to be moving, and we need it to move because we have got a lot of it... it is the cheapest feed out there. We need ethanol to keep moving too,” one corn trader said.

“We have to figure out some way to increase some domestic consumption,” a second source said, as exports alone would be unlikely to clear stock levels.

The USDA’s most recent WASDE report, released in January, puts total food seed and industrial uses of corn at 6.995 billion bushels, with ethanol and by-product corn demand set at 5.525 billion bushels from a total production of 14.6 billion bushels.


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