Three weeks ago, Darrel Good, a University of Illinois agricultural economist, assessed the corn and soybean consumption rate and concluded that corn consumption was progressing too rapidly based on available supplies. Soybean consumption appeared to have slowed enough so that further rationing was not required.

“Since that assessment, the cash price of corn in central Illinois has increased by 22¢ and soybean prices are up 25¢. The higher soybean prices have resulted from a 3% increase in soybean oil prices. The average cash price of soybean meal in central Illinois has declined by $7.70/ton, or about 2%,” says Good.

Following is an update of the likely pace of consumption. For the 2010-2011 marketing year, the USDA projects that 4.9 billion bushels of corn will be used for ethanol production – 7.3% more than used in the previous year. Ethanol production during the first five months of the 2010-2011 marketing year was 15% higher than during the first five months of the previous year, he says.

“The rate of increase slowed modestly in January, but production was still 11% more than in January 2010. There have been reports of a higher-than-average yield of ethanol bushel of corn this year. Even so, corn use for ethanol production is still proceeding well above the projected level,” he says.

Good says that the USDA projects 2010-2011 marketing year corn exports at 1.95 billion bushels, 37 million bushels less than exported last year. Cumulative export inspections through the first 22 weeks of the marketing year were reported at 711 million bushels, 6 million larger than inspections of a year ago.

Through January of the 2009-2010 marketing year, however, cumulative Census Bureau export estimates exceeded inspections by 63 million bushels. Through November of the 2010-2011 marketing year, Census Bureau export estimates were 20 million bushels larger than inspections, he says.

“The difference has increased each month since September, as it did last year. When adjusted for Census Bureau estimates, it appears that exports through January 2011 were likely about 20 million less than those of a year ago,” he adds.