“We don’t want to get too bearish and say that the prices are going to go down forever, but I think fundamentally the demand side looks very much different now than it did four years ago.”

The report also means that this year’s corn acreage is one of the largest on record.

 “If you go back to the 1940s, you might find bigger acreage, but in modern history, 2007 had record corn acres and 2011 looks to be the second largest,” Good said.

How does EPA’s plans for 15 percent ethanol blends affect the corn market?

Good said that the 15 percent blend could accommodate current policies in terms of mandated levels of biofuels production.

“If we eliminate the tax incentives, we may be looking at ethanol production coming down because we’re not producing above the mandated level,” Good said.

“If the tax incentive goes away and fuel prices come down a bit, then we might see blenders drop back to just blending the mandated levels for the biofuels in the year ahead.  

“That’s a lot of ifs, but even if they don’t, we’re still saying that the rate of increase in ethanol production has slowed considerably, and we’re not going to see the growth spurt that we’ve seen in the past three years.”

Good said that year-ending stocks may be closer to 900 million bushels by Sept. 1, 2012.

It was a different story for soybeans, Good said.

“June 1 soybean stocks were a bit higher than expected, close to 30 million bushels,” Good said. The planted acres number at 75. 2 million came in well below expectations.

“The crop could come in considerably below what the USDA has projected for consumption for the upcoming marketing year. So, unless we have quite good yields on soybeans, we may be in a rationing situation on the soybean crop next year, like we thought we would have on corn this past year.”