The USDA's Sept. 12, 2011, Crop Production report confirmed expectations of a smaller U.S. corn crop than forecast in August, said a University of Illinois agricultural economist.

"The September soybean production forecast, however, is larger than the August forecast, and the forecast size of the foreign wheat, coarse grain, and soybean crops also exceed the August forecasts," said Darrel Good.

The 2011 U.S. corn crop is now forecast at 12.497 billion bushels, 50 million larger than the 2010 crop, but 417 million smaller than the August forecast.

The lower forecast reflects a U.S. average yield of 148.1 bushels, compared to 153 bushels forecast last month. Yield expectations were reduced by 10 bushels in Iowa; 9 bushels in Illinois; 6 bushels in Missouri and Nebraska; and 5 bushels in Indiana, Kansas and Ohio.

Forecast yields were increased for a few states, including Michigan. The U.S. average yield projection is near the average market expectation.

In a separate report, the USDA's World Agricultural Outlook Board increased the estimate of corn consumption during the year ended Aug. 31, 2011, by 20 million bushels (10 million each for domestic processing and exports). Sept. 1, 2011, corn stocks are now forecast at 920 million bushels.

"Actual stocks will be revealed in the USDA's September Grain Stocks report to be released on Sept. 30," Good said.

For the current marketing year, the smaller production forecast forced a reduction in the projected level of consumption and year-ending stocks. Projections were reduced by 200 million bushels for feed and residual use and 100 million bushels each for domestic processing and exports.

Sept. 1, 2012, stocks are projected at 672 million bushels, and the 2011-12 marketing year average farm price is projected in a range of $6.50 to $7.50, 30 cents higher than the August projection and well above the $5.20 average of the past year.