For the corn balance sheet equality to hold, if ethanol use declines, it is true that either total supply must decrease, or ending stocks must increase. In the financial market, an increase in the supply of funds typically leads to a decline in interest rates.
The student's question regarding the corn balance sheet pertains to the relationship between supply, demand, and ending stocks. If ethanol use, which is a use item on the balance sheet, declines, then for the balance sheet equality to remain intact, either the total supply must decrease or the ending stocks must increase. This is because the total supply consists of the initial stocks plus production, and the uses subtract from this total. If uses go down and production does not change, stocks must go up or else supply must go down to maintain balance.
Looking at the financial market scenario, a decline in interest rates is typically caused by either a decrease in demand for funds or an increase in the supply of funds. Per the referenced material, a rise in supply of financial resources in the market would generally lead to a decline in interest rates, as it increases the availability of funds relative to the demand.