Market Report: Corn Lower, Beans Firmer

Corn had almost no response to the USDA report at 11 Friday morning, but eventually closed down 5-8 cents. Most traders expected the USDA to lower the yield but instead the USDA raised the yield a half a bushel an acre to 168 bushels an acre. Projected carryover was raised from 1.498 billion bushels to 1.561 billion. That increase was nothing more than a rounding error when you think about a 13.5 billion-bushel corn crop. I suspect that with a good weather forecast, traders expected a lot of corn would be harvested and we might see more harvest pressure.

Beans managed to close about 4 cents higher after the USDA report. Beans did rally after the report but ran into resistance at the 50-day moving average. Traders termed the report slightly negative as the USDA raised the bean yield by a tenth of a bushel when traders expected a cut. Carryover was raised to 425 million bushels when the average trade guess was 398 million. There was probably some anticipated hedge pressure in beans, too, with the good weather forecast.