USDA Report Bad News For Bulls

Corn prices lost 3-5 cents a bushel Thursday after the USDA March Supply Demand Report. Carryover here in the United States was left unchanged at 2.32 billion bushels. The USDA increased corn used for ethanol by 50 million bushels, but then cut feed demand for 50 million. With the cattle on feed report, hog and pig report all showing increased livestock production and poultry production up, I do not understand how feed demand can be cut. The USDA raised corn production in Brazil by 5 MMT and Argentina by 1 MMT. So, the world numbers were bearish. Maybe we were fortunate corn closed Thursday only 3-5 cents lower?

The USDA had a lot of negative news for beans with larger production increases in South America than expectations. Production in Brazil was increased a whopping 4 MMT to 108 and Argentina unchanged. Traders expected to see Argentina estimates dropped because of flooding conditions. So, even an unchanged number was bearish. Another bearish surprise for beans was that the USDA actually increased carryover in the United States slightly to 435 million bushels by decreasing exports. I do not understand that move either. We are ahead of last year on bean exports and we were ahead of the pace we needed to be on to meet the export projection before the decrease?