“Corn exports during the current marketing year are forecast at 2 billion bushels, or an average of 38.5 million per week. The total is only 13 million more than was exported last year. Export inspections during the first eight weeks of the year averaged 34.3 million bushels per week. Cumulative inspections are 5.9 percent below last year's total.

"Unshipped export sales as of Oct. 21, however, stood at 520 million bushels, compared to only 405 million on the same date last year. The pace of exports and export sales present a mixed picture — large sales, but slow shipments," he said.

The USDA forecasts that 3.1 percent more corn will be used for ethanol production during the current marketing year than was used last year. During the first eight weeks of the marketing year, ethanol production exceeded that of a year ago by 18 percent. If the current rate of increase in ethanol production continues, corn use would exceed the projected level of 4.7 billion bushels by 680 million bushels.

"Such a large rate of increase will not be maintained, and feed use of corn will be reduced if production of distillers' grain exceeds the current projection. Still, corn is currently being consumed too fast and a substantial slow-down is required," Good said.

Three important developments will add further information to the assessment of the pace of consumption. These include the updated corn production forecast to be released on Nov. 9, prospects for Chinese imports of U.S. corn, and the fate of the 45-cent per gallon blender's tax credit for ethanol.

"Last week, we made the case for the need for more corn acres in the United States in 2010. Does the price of $5.40 for December 2011 corn futures provide enough incentive to expand corn acreage by 5 to 6 percent next year?" he asked.

Even with November 2011 soybean futures near $11.70, projected crop budgets for 2011 show an economic advantage of corn production compared to soybeans in the Midwest. Corn prices then appear high enough relative to the major competing crop for corn to capture more acreage next year, Good added.

The question may be whether there is enough acreage available to get the large increase that appears to be needed. That depends in part on how many additional acres will be brought into production in 2011 and how many acres are used for winter wheat, cotton, and a variety of minor crops, he said.

"A case can be made that old-crop corn prices need to move higher to slow the pace of consumption. Prospects for new-crop prices are not as clear. Current prices may be high enough to attract sufficient acreage in 2011. If not, those prices may have to increase later."