Coronavirus cases in the U.S. have surged in recent weeks—led by new cases in California, Florida, and Texas. Stay-at-home orders and business closures this spring took a bite out of grain demand, with ethanol production, livestock feed, and food products using less grain amid reduced consumer demand.
In its report Friday, the USDA said that it expects consumption of corn by the U.S. ethanol industry to fall by another 50 million bushels. That brings the projection for total domestic corn consumption to 12.5 billion bushels, which is down from last month’s forecast.
Production of ethanol in the U.S. plummeted to 537,000 barrels a day in late April, the lowest figure since the U.S. Energy Information Administration started keeping the data set in 2010. Ethanol production has bounced back, with production hitting 914,000 barrels a day this week. However, it is still down 13% from the same time last year.
How much U.S. grain exports China will buy as a result of the phase one trade agreement between the two countries also remains to be seen. However, in a separate release this morning, the USDA confirmed that China purchased 1.4 million metric tons of U.S. corn—with just over half of that for delivery in this marketing year. It is the first confirmation of large Chinese purchasing in two weeks.
Speaking to reporters Friday, President Trump cast doubt on going forward with a phase two trade deal between the two nations, citing dissatisfaction with China’s response to the coronavirus outbreak.