Friendly USDA Report?

Corn closed about unchanged Thursday after the May USDA Supply Demand Report. However, you could certainly say longer term the numbers were very friendly, maybe even bullish for corn. The 2017-18 crop year U.S. carryover was left unchanged at 2.178 billion bushel. However, looking at new crop 2018-19 is where it gets interesting. The U.S. carryover drops about 500 million bushel to 1.682 billion bushel. Plus, that is using a very high national average yield of 174 bushel an acre. In addition the new crop world carryover drops from 194.85 MMT to 159.15 MMT. This will result in one of the tightest stocks to usage ratios in recant memory!

Beans closed 5 to 6 cents higher Thursday after the report. The USDA numbers were called neutral to maybe a little friendly for beans. Old crop U.S. carryover was in line with expectations at 530 million bushels. Carryover for the U.S. for new crop was much smaller at 415 million bushel. World projected carryover increased from the April USDA estimate of 90.8 MMT to 92.16 MMT. The USDA was also using a very high yield bean here in the U.S. of just under 50 bushel an acre. We have seen 4 years in a row in the U.S. of above trend line yields. A less than trend line yields this year and things would get interesting very quickly!