The US Department of Agriculture's (USDA) latest report on corn and soybean stocks has sent shockwaves through the markets. The report, released on October 2nd, revealed a significant increase in carryout, with corn stocks rising by 173 million bushels.
This is the second-largest bearish surprise since 2010, with only last year's report being more severe. The USDA did lower last year's yield, but only by reducing harvested acres, not yield, as many analysts had expected.
The increase in carryout puts old-crop corn stocks above the psychologically important 2 billion-bushel mark, adding more buffer onto new-crop carryout.
Despite the bearish tone of the report, Brooks Schaffer of Palmetto Grain notes that there is still a lot of tightness in the corn balance sheet and a lot going on in the world that has not been addressed.