[Listen] Gordy June USDA Supply Demand Report
Typically the USDA does not make big changes in the June USDA Supply Demand Report .This month was no different as the USDA made just minor adjustments to the corn or bean carryover estimates. Corn carryover for old crop was just 100,000 less than the trade guesses at 1.1 billion. So, that was slightly friendly. Bean carryover was only 15 million bushel higher than trade guesses so maybe slightly negative. However, corn beans sold off sharply after the report and that pulled corn lower too.
When you think about a 14.5 billion bushel corn crop and 4.5 billion bushel of beans those changes the USDA made would not even amount to a "rounding error." so, it is difficult to understand was there was such a huge market reaction? We did rally back off the lows to trade corn higher but soybeans were still quite a bit lower. The USDA even dropped the Brazil second crop of corn by 4 million metric ton which is a pretty big adjustment. The trade was expecting a 5 million metric ton cut.
Maybe the big market reaction came from the hot dry weather in the upper Midwest, the second crop of corn in Brazil that has been hurt by hot dry weather and very tight corn and soybean carryover for old and new crop? For new crop, carryovers are already projected by the USDA it be very tight even with the USDA projecting almost record yields. Click on the link above and listen to Gordy's thoughts on the actual June USDA Supply demand Report, the market reaction and where we go from here'
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