The U.S. Department of Agriculture reported Monday that U.S. corn ending stocks for 2008/09 are projected 316 million bushels higher this month on higher estimated production and lower expected use.

Corn production for 2008/09 is estimated 81 million bushels higher.  Feed and residual use is reduced 50 million bushels reflecting lower animal numbers and September-November disappearance as indicated by December 1 stocks.

The USDA reported that ethanol corn use is lowered 100 million bushels as sustained negative ethanol production margins since early December have reduced incentives for ethanol output.  Recent increases in trading values for Renewable Identification Numbers (RINs) that can be used in lieu of ethanol to meet mandated levels also indicate reduced demand for ethanol.

Projected food, seed, and industrial use is lowered an additional 35 million bushels on lower-than-expected
use for sweeteners and starch during September-November.

Exports are projected 50 million bushels lower based on the slow pace of sales and shipments to date. The projected season-average farm price for corn is lowered 10 cents on each end of the range to $3.55 to $4.25 per bushel.