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, said University of Illinois agricultural economist Darrel Good.

"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," he said.

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 five 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.

According to Good, 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).

"At 1.6 billion bushels, U.S. corn exports are expected to be at the lowest level in nine years due to increased competition from larger corn and wheat exports from other origins. The largest increases are expected for Russia, Kazakhstan, and Ukraine due to a 40 percent increase in production over last year's drought-reduced crops," he said.

To reach the USDA forecast of 1.6 billion bushels, U.S. corn exports need to average about 30.7 million bushels per week. Through the first five weeks of the marketing year, export inspections averaged only 28 million bushels per week.

New export sales, however, have been relatively large. Those sales averaged 50.2 million bushels per week for the two weeks ending Oct. 6. Sales of 10.3 million bushels to Mexico were reported on Oct. 11, and sales of 35.4 million bushels to China and 11.5 million bushels to unknown destinations were reported on Oct. 13. The weekly pace of new sales will have to average only about 17 million bushels to bring sales to 1.6 billion bushel.