USDA monthly supply/demand report out this morning featured aggressive yield cuts to the corn crop. National corn yield slashed from 166bpa to 146bpa. There were some demand cutbacks both for this year and next, so the ever-important carryout numbers stand at 903Mln for this current marketing year and 1.183Bln for next year. Soybean yield was lowered slightly to 40.5bpa. Soybean carryouts are 170Mln this year and 130Mln for next year.

These numbers, along with current weather, are supportive to prices. However, be aware that corn demand rationing is actively happening. Corn exports are non-existent and rumors of Brazilian corn imports to the SouthEast US look to be valid. The ethanol sector is suffering amid negative margins and unless crude oil return to $100/barrel or national gas consumption reverses the declining usage trend, this will continue.

Prices have been higher, but volatile following the report. Currently corn is up 15 and beans up 25.

http://www.fccoop.com/markets/information.cfm