The USDA projects corn stocks at the end of the 2010-11 marketing year will total only 745 million bushels, said University of Illinois agricultural economist Darrel Good.

“That projection represents 5.5 percent of projected marketing year consumption. Stocks as a percent of consumption would be the smallest since the record low 5 percent of 1995-96. And 5 percent is considered to be a minimal pipeline supply,” he said.

Marketing year-ending stocks of soybeans are projected at 140 million bushels, or 4.2 percent of projected consumption. That ratio is slightly smaller than the previous low of 4.4 percent in 2003-04.

“The low level of inventories projected for this year reflects different market conditions than those that existed in either 1995-96 or 2003-04. Both of those years were characterized by small crops that required a sharp reduction in the level of consumption just to maintain minimum year-ending stocks. Year-over-year consumption of corn declined by 8.5 percent in 1995-96, and soybean consumption declined by 9.5 percent in 2003-04,” he said.

In contrast, corn consumption during the current marketing year is expected to be 2.8 percent larger than the record of last year. Soybean consumption is expected to be about equal to last year’s record. The low level of expected year-ending corn stocks is the result of a 2010 corn crop that was 5 percent smaller than the record crop of 2009 and a rapid acceleration in the use of corn for ethanol production.

The 2010 soybean crop was only 0.8 percent smaller than the record crop of 2009. Stocks at the beginning of the year, however, were small, and exports are expected to be record large. Exports are increasing primarily as a result of strong Chinese demand.