Corn in the United States has a different picture compared to Brazil. Corn ethanol accounts for 1/3 of domestic demand, and the collapse of the sector has direct effects on total demand and final stocks. However, USDA has not yet caused a sharp cut in domestic demand in the proportions that some sources of information project, mainly because the shutdown cycle may last three months rather than one year.
The USDA’s April supply and demand picture was expected to show a demand sharply adjusted downwards due to the first severe crisis of the local ethanol industry. Effectively, there was a sharp cut in the demand for ethanol corn by almost 8 million tons and by 6 million tons in the food industry. This was partly offset by the increase in the demand for feedstuff by 7 million tons. In other words, the USDA still sees support in the meat sector to the point of neutralizing part of the negative effects of ethanol, perhaps even due to low corn prices.
However, this mathematical demand did not prevent an increase in final stocks from 48 to 53 million tons. There was still no incentive to raise the projections for corn exports, considering that weekly sales have not changed the horizon of the current business year.