Larger feed lot inventories of cattle and declining corn prices relative to wheat prices do not point to declining feed use of corn. 

Weekly estimates of ethanol production continue to be marginally larger than production needed for corn use to reach the USDA projection of 5 billion bushels for the year. High prices of gasoline relative to ethanol prices continues to favor ethanol blending. Ethanol consumption, however, could be threatened if high gasoline prices result in a further decline in fuel consumption.

A case can be made for a smaller projection for corn exports during the current marketing year. Weekly export inspections continue to be below the rate needed to reach shipments of 1.95 billion bushels. 

New sales in the last two weeks of April also dropped below the rate needed to sell 1.95 billion bushels of U.S. corn this year. Increased feeding of wheat in some parts of the world and the strong price incentive to purchase new crop rather than old crop U.S. corn may result in shipments falling short of 1.95 billion bushels.

With new crop availability still 4 to 5 months away, it is not clear how much import business can be delayed.

The wild card in the corn market is the development of the 2011 crop. The slow start to planting has raised issues about both the yield potential for the 2011 crop and the magnitude of planted acreage. 

The U.S. average corn yield can still be high with more than the normal amount of the acreage planted after the optimum date, but yield would be expected to be lower than if most of the crop was planted in a timely fashion. 

The weakening LaNina provides some hope that the Corn Belt will not experience stressful summer weather and that the U.S. average corn yield can still approach a trend level. 

Reports suggest that planting made good progress last week in northern Illinois, Iowa, and Nebraska. Planting delays look to be more severe in the rest of the country. 

Corn acreage may exceed intentions in areas now being planted rapidly, but could fall short of intentions in the extremely wet areas.

Unlike the previous price declines over the past 9 months, corn prices may have more difficulty rebounding from the current decline if the USDA increases the projection of year ending stocks. Prices will likely now depend more on planting progress and crop development.