Factors that have contributed to or may contribute to this shift include the availability of lower-priced wheat for the livestock sector, corn export competition, the end of the ethanol blenders' tax credit scheduled for the end of the year, and the general economic weakness that may reduce the overall demand for agricultural commodities, he said.
The October corn production forecast along with the estimate of Sept. 1 inventories of old-crop corn will solidify supply estimates and quantify the magnitude of rationing required by the corn market. After that, the pace of consumption will be monitored to determine if the necessary reduction in consumption is occurring, he said.
Some evidence that consumption is progressing too rapidly may be required to change the recent trend in prices. Weekly export data, which currently show a slow pace of shipments but a reasonable pace of new sales, provide the most visible information, he said.
"Weekly ethanol production data provide the most frequent information on the pace of domestic consumption. Ethanol production in the first week of the marketing year, for example, was about 1 percent larger than in the same week last year," he noted.
The pace of domestic feed use is the least transparent, he said. "USDA reports of livestock and poultry inventories will provide some basis for judging overall feed demand. The magnitude of feed and residual use of corn, however, will only be revealed with the quarterly Grain Stocks reports."