Going into Friday's USDA Quarterly Grain Stocks Report corn had rallied about 25 cents a bushel off the lows. The USDA said corn stocks on September 1 were at 2.14 billion bushel. That was down from a year ago when the stocks were 2.29 billion bushel. Even with a record corn crop corn last year stocks were lower. However, the stocks this year were above the highest guess so corn dropped around 8 bushes an acre. On the positive side, with a record crop in the Unites States and the world, world corn stocks are dropping. So, maybe there is hope longer term?

Bean traders like corn were focused on the stocks numbers and they were bearish too. Soybean stocks came in at 438 million bushel which compares to a year ago at 302 million, That is almost a 50 percent increase compared to last year. Taking that increase into this years Supply Demand tables and it really gets ugly. Carryover for the 2018/19 marketing year balloons to a whopping 890 million bushels.

Remember in July the USDA added 250 million bushel of beans to this years carryover because of the trade war with China. The USDA assumed China would buy a lot less beans from the United States. However, we are hearing talk about Canada, Mexico, Argentina and even Brazil will buy beans from the United States and export their beans to China. In addition we can crush the beans and export the soybean meal to China with no tariff. It sure appears that the USDA is being overly bearish!