For soybeans, a 5-million-bushel reduction in the projection of the domestic crush and a 10-million-bushel reduction in the projection of exports were offset by an increase in the projection of residual use.

"The increase in residual use was motivated by the March 1 stocks estimate that revealed a high rate of seed, feed and residual use during the first half of the marketing year. For the year, seed, feed and residual use is projected at a four-year high of 125 million bushels, but well below the average of 164.5 million bushels during the period 1997-98 through 2006-07," he said.

Projections of marketing-year consumption of soybean meal were unchanged from the March projections. For soybean oil, the projection of imports was increased by 60 million pounds while the projection of exports was increased by 100 million pounds. At 2.358 billion pounds, the projection of year-ending stocks of soybean oil is 1 billion pounds below the level of stocks at the beginning of the year.

The projection of the use of soybean oil for production of methyl ester (biodiesel) was unchanged at 2.7 billion pounds. That projection was reduced by 200 million pounds last month.

"The current projection requires average monthly consumption of 225 million pounds. Consumption during the first three months of the marketing year (October to December 2010) averaged 75.4 million pounds per month. The average increased to 111.5 million pounds in January and February 2011, after the blender's tax credit was reinstated. To reach the projection of 2.7 billion pounds for the year, use during the last seven months of the marketing year needs to average 321.6 million pounds per month," he said.

The Census Bureau started reporting use of all soybean oil for production of methyl ester in October 2006. In the 56 months since then, use exceeded 300 million pounds in only four months, the latest being August 2008.

Corn prices should continue to be well supported by a high rate of consumption and prospects for small year-ending stocks. Evidence of a slowdown in corn consumption is still needed. The record-large Brazilian soybean crop, along with the observed slowdown in consumption of U.S. soybeans, provides less support for soybean prices, Good noted.

"The market will now also begin to reflect prospects for the 2011 crops. Corn planting is on schedule in the South and has started in the Midwest. Concern is mostly centered on the potential for a late start to planting in northern growing areas," he said.