The USDA projects 13.245 billion bushels of U.S. corn will be consumed during the marketing year that ends on Aug. 31, 2011.

That forecast is 60 million bushels below the July forecast, but is 179 million bushels above the record consumption in the previous year, said University of Illinois agricultural economist Darrel Good.

"Corn exports during the year just ending are projected at a six-year low of 1.825 billion bushels. Domestic feed and residual use of corn is projected at only 5 billion bushels, the smallest use in 15 years," he said.

Declining feed use of corn since 2005-06 reflects the increasing consumption of distiller's grains and other co-products of ethanol production.

"Domestic processing use of corn during the current marketing year is expected to reach a record 6.42 billion bushels, 459 million more than consumed last year. The increase reflects an expected increase of 429 million bushels in the amount of corn used for ethanol and by-product production," he said.

Based on the current USDA projection of the magnitude of old-crop corn supplies on Sept. 1, 2011, and the projected size of the 2011 crop, corn consumption may have to be reduced by a small amount during the 2011-12 marketing year.

Stocks of 940 million bushels, imports of 20 million bushels, and production of 12.914 billion bushels provide for a 2011-12 marketing year supply of 13.874 billion bushels. The projected supply is 311 million bushels less than the supply for the current marketing year.

"Assuming that marketing year-ending stocks cannot be reduced below 5 percent of consumption, projected supplies would limit 2011-12 marketing year consumption to 13.213 billion bushels, leaving year-ending stocks at 661 million bushels," Good said.

The actual supply of corn that will be available for use during the year ahead may differ from the current projection. The size of old-crop stocks on Sept. 1 will not be known until the USDA releases the quarterly Grain Stocks report on Sept. 30.

The size of the 2011 corn crop will not be known until the USDA releases the final estimate in January 2012.

New forecasts, however, will be available in September, October, and November. Historically, the October forecast has been reasonably close to the final production estimate.