USDA reported tightened corn stocks and a smaller hard red winter wheat crop, both points considered bullish for Friday's early trading.

For hard red winter wheat, USDA lowered its crop estimate from 715 million bushels in May, to 658.6 million.

Don Roose, U.S. Commodities, said the USDA had no choice in lowering this figure.

"The drought in Oklahoma, Texas, Colorado, and Nebraska has caused a shorter crop. This will be friendly to the market," Roose said.

For corn, the bullish item was in the old-crop carryout. USDA lowered that figure by 50.0 million bushels, while raising exports by the same amount.

"That carries over into the new-crop balance table, tightening ending stocks for 2006-2007 at 1.09 billion bushels," Roose said.

For soybeans, Ann Fricke, Prudential Securities Financial, said the report carries a slightly bearish tone.

USDA raised old-crop and new-crop carryover's by 5.0 million bushels. Also, 2005-2006 world ending stocks were lowered from 55.94 million metric tons in May to 55.5 million. For 2006-2007, world soybean ending stocks were estimated at 57.92 million metric tons.

"For soybean oil, USDA reduced its domestic usage estimate, which is surprising given the evidence that biodiesel usage is increasing," Fricke said.

USDA raised soybean oil ending stocks to 17.95 million pounds from 18.0 million. Soybean oil exports were lowered 50 million pounds to 10.75 million.

USDA reported tightened corn stocks and a smaller hard red winter wheat crop, both points considered bullish for Friday's early trading.