The crop report was released today, and it held a rather large surprise, that surprise being that the USDA aggressively cut corn‘s projected yield from 176 BPA to 166 BPA. Typically, the USDA doesn’t like to make such big adjustments so soon into the growing season, let alone such a huge change in one swoop, they are usually more incremental in adjustments to production. RJ O’Brien commodities broker, Richard Feltes, believes this too, saying, “The USDA is not known for making dramatic cuts in early-season U.S. row crop production forecasts.” Many believe the reason for this large cut could be the unseasonably wet May we had which has left the corn fields uncharacteristically soggy.

This may not be the end for the decline in corn either as farmers will have to take into the possible effects of the U.S.-China trade war and weigh the inherent risk. We will have more information in the backend of June when the USDA releases the number of acres planted survey.

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Corn Dec ’19 Daily Chart