Market Report: Ouch!

Corn was broadsided for the USDA Report today and closed 18-19 cents lower. The USDA raised the estimated corn yield this year by 2 bushels an acre while most traders expected a drop of a couple of bushels an acre. Projected total production this year is now at 13.686 billion bushels. Carryover was moved up to a little over 1.7 billion bushels. World carryover for old crop was raised by 3.7 million bushels and new crop raised by 5.59 million metric tons. When talking about the numbers at 11:15 this morning, Gordy had a great point. If you believe the crop conditions report by the USDA, the corn rated good to excellent are well below last year. But the USDA projects a much higher yield than last year! How does that work?

Beans did not fare any better, closing over 60 cents a bushel lower. The USDA raised the national soybean yield by about a bushel an acre to almost 47 bushels an acre. With a slight drop in acres that still puts production at 3.916 billion bushels. Some traders were thinking new crop carryover might be just under 30 million bushels. Instead the USDA projected a carryover of 470 million bushels! The crop condition ratings for beans are also much lower than last year but the USDA projects a much higher yield than last year. Like corn, how does that work?