The 2011-2012 corn and soybean marketing year officially begins on Sept. 1. The 2010-2011 marketing year is ending with a slowdown in the consumption of both corn and soybeans, suggesting that year-ending stocks could be larger than projected in the USDA's July World Agricultural Supply and Demand Estimates (WASDE) report, according to University of Illinois Agricultural Economist Darrel Good.

"Those stocks will not be known until Sept. 30, and the estimates in the September Grain Stocks report often deviate from expected levels," he says.

The USDA will release updated forecasts of 2010-2011 marketing year consumption and ending stocks on Aug. 11, he adds.

"The 2010-2011 marketing year is also ending under a cloud of poor economic and financial news that raises concern about demand for corn and soybeans in the feed, energy and export markets during the year ahead," Good says.

The strength of demand determines the quantity of corn and soybeans that will be consumed and the price end users are willing to pay. In the near term, however, the size of the 2011 U.S. corn and soybean crops will be most important for prices, he notes.

"Large crops in combination with weakening demand would allow prices to drift lower. On the other hand, small crops might require higher prices to limit consumption even under a weakening demand scenario," says Good.

The USDA will release the first survey-based forecast of the size of the 2011 U.S. corn and soybean crops on Aug. 11. Those forecasts will reflect information collected in the Agricultural Yield Survey (AYS) of producers and in the Objective Yield Survey (OYS), he says.

"For the AYS, about 27,000 producers in 32 states for corn and 29 states for soybeans were surveyed around the first week of August and asked to estimate the number of acres to be harvested and to forecast the final yield of each crop," he says.

For the OYS, USDA enumerators made plant counts and measurements in 1,920 corn fields in 10 states and 1,835 soybean fields in 11 states in order to forecast final yield, he adds.