Report was bearish all the way around today as we saw an increase in yield for both beans and corn. The ending stocks on beans were much higher than trade expected, coming in at an all time high of 105.9 million tonnes. This set the tone for the report. We will be keeping an eye on corn to finish the climb to the top as more information is released regarding trade concerns with China and the actual realized crop in the mid-west.
USDA raised corn and bean yield a little more than the market was expecting. This increase was enough in beans to push the market down 35 cents very quickly after the report was released. The increase in corn was not enough to provoke a big reaction, but with the action in beans, corn could not hang on and it drifted lower most of the day. The world numbers also came out a bit bigger than the market had anticipated and also added to the pressure.
Corn had a decent winning streak as the market debates the size of the crop and this will set that back just a bit. Even with the size crop projected currently, the world numbers are still significantly tighter than last year and the market will need to do work to keep from losing acres this fall to beans in South America. I think this is a buying opportunity for corn. Beans will go back to trading weather. USDA gave us a big yield but we have to continue to get good weather to achieve it. Wheat will also go back to debating the size of the world crop and how much damage was done. All in all this was not the report we wanted, but we do not see it turning the tide long term. Need weather on beans and more debate on yield in corn.