With the USDA’s October Crop Production report, corn and soybean supply forecasts for the 2011-12 marketing year are likely close to the final estimates. Prices will be primarily influenced by the current rate of consumption and expectations about consumption during the remainder of the marketing year. The actual rate of consumption will be revealed sporadically, and in some cases, slowly. Expectations about future consumption will likely vary widely.

For corn, the current supply forecast of 13.576 billion bushels is 606 million bushels smaller than last year’s supply and the smallest supply in 5 years. Assuming that year-ending stocks will not be less than 5 percent of consumption, consumption of U.S. corn during the current marketing year will be limited to 12.93 billion bushels, 123 million bushels (about 1 percent) less than consumed last year. The USDA currently forecasts consumption at 12.71 billion bushels, 343 million bushels (2.6 percent) less than consumed last year. Exports are expected to be 235 million bushels (12.8 percent) smaller, feed and residual use is expected to decline by 103 million bushels (2 percent), ethanol and by product use is expected to decline by 20 million bushels (0.4 percent), and other food and industrial uses are expected to increase by 15 million bushels (1.1 percent).