On Feb. 8, the USDA released new projections for marketing year consumption of U.S. corn and soybeans. 

Prices will now be at least partially influenced by how closely the rate of consumption tracks these projections.

For corn, the projection of marketing year exports was reduced by 50 million bushels, to a 41-year low of 900 million bushels. Through the first 23 weeks of the marketing year, export inspections totaled 327 million bushels. 

The Census Bureau export estimate for the first four months of the year was 14 million bushels larger than the inspections estimate. Assuming that margin persists, exports during the remainder of the year need to total 559 million bushels, or an average of 19.1 million bushels per week, to reach the USDA projection.

The average pace to date is 14.9 million. As of Jan. 31, only 218 million bushels had been sold for export, but not yet shipped, compared to outstanding sales of 351 million bushels a year earlier.

With prospects for a much larger corn harvest in Argentina and another large crop in Brazil this year, there is some chance exports will fall short of the current projection.

The USDA projects that 4.5 billion bushels of corn will be processed into ethanol and by-products during the current marketing year, unchanged from the January projection and 10.2 percent less than processed during the previous year. 

Favorable blending margins, prospects for a slowdown in imports of Brazilian ethanol, and some improvement in ethanol production margins suggest that the pace of ethanol production will increase enough to at least reach the USDA projection of corn use.

Feed and residual use of corn during the current marketing year is projected at 4.45 billion bushels, unchanged from the January projection and only about 100 million less than used last year. 

Due to the early harvest of the 2012 crop, use was likely understated for the final quarter of the 2011-12 marketing year and overstated for the first quarter of the 2012-13 marketing year.