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A 'bull' run -Ron and Sue Mortensen

Overall, the USDA’s reports showed more bullish numbers than the market was anticipating.  With a corn crop of 12.914 billion bushels and a soybean crop of 3.056 billion bushels, traders were surprised with both numbers coming in below the pre-report guesses. 

The USDA made several adjustments to usage for corn and soybeans as well.  Some of these changes are simply an attempt to guess how small crops will be rationed to make carryout a minimal pipeline number. 

Still, there are themes that are easy to identify.  There is more wheat in the world, so more wheat will be fed.  This makes it easy to reduce corn exports.  For beans, with abundant South American supplies, the USDA was able to sharply reduce US soy exports. 

Both supply/demand tables have exceedingly tight ending stocks to usage ratios. In some ways, even if the crops are made smaller in future reports, the carryouts will not change.  Demand will have to be rationed.  On the flipside, larger crops may be well received by end users.  Demand will increase and carryouts will still look tight.         

In the Crop Production report, the USDA did make changes in planted and harvested acres, but not necessarily where they were expected.  For corn, harvested acres were reduced 500,000 acres.  This adjustment was made entirely in the drought affected southern states of Texas, Oklahoma and Kansas.  There were no changes in planted acres and no reductions in northern states like North Dakota or Missouri, where flooding and wetness were constant themes in the early summer. 

For soybeans, the re-survey in four northern states did find reduced plantings.  North Dakota plantings were reduced 50,000 acres and South Dakota was reduced 200,000 acres.  Reductions in harvested acres were 50,000 for North Dakota, 190,000 for South Dakota, 160,000 for Oklahoma and 35,000 in Texas.

The market will probably need to wait until October for any significant changes to the acreage data.  At that time, the RMA will provide the USDA with crop insurance data showing planted acreage.


The risk of loss in trading commodities can be substantial.  You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.  

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