There is no hope for higher corn and beans prices ever again. It sure seems that way as you look at the USDA Supply Demand Report and read all the market analysts. Even though the projected corn carryover is not burdensome at about 1.7 billion bushel all you read and hear about is the trade war with China and low energy prices hurting ethanol demand. Domestic and export demand for corn has been very strong but the market seems to ignore that!

With the USDA projected bean carryover at just under a billion bushel you cannot argue that is bearish. If that is the actual carryover! Time will tell if the USDA is correct with that projection but there sure are indications that the USDA is wrong! However, the market believes the numbers and trades the numbers so we have to pay attention to them!

All I know is if you read farmer comments on web sites about their yields, is sure sounds like the USDA is too high with their corn and bean yield projections. In the last month I have driven to Kansas City and around  Minnesota and you do not see the corn and bean piles outside like the last couple years!

Finally, all the talk about low crude oil and gas prices hurting corn demand for ethanol production. On average all gasoline burned in the United States is blended at just over 11 percent ethanol on average. There is a 10 percent mandate plus many cars are flex-fuel and are burning much higher blends of ethanol, some up to 85 percent ethanol.

With low gas prices would not people be temped to drive more, useing more gas and ethanol? There is an old phrase in the grain trade and hopefully it is still true. " Maybe the low in prices is near, if everyone is bearish and convinced there can never be a rally again."