The USDA had the biggest surprise for the market in their corn estimates. They raised the national average yield by .5 bushels per acre to 147.2 which also raised total production by 48 million bushels to 12.358 billion bushels. Along with the higher production they also increased exports by 50 million bushels, so the net change on ending stocks was only an increase of 2 million bushels. However, the market was expecting to see lower production from a lower national average yield and a lower ending carryout, by about 100 million bushels. So, even though the numbers were little changed, the market was caught expecting much lower ending stocks and thus the report, while not much different than the previous month’s, was viewed as being overwhelmingly bearish. Thus, we had limit down corn that day, down $.40 cents per bushel.

On soybeans, the USDA put the national yield up by .2 bushels per acre, to 41.5 and raised total production by 10 million bushels, to 3.056 billion bushels. They also decreased domestic crush by 10 million bushels and decreased exports by 25 million bushels. So, ending stocks on beans went up by 45 million bushels. And here too, the market was looking for a much smaller increase of only 3 million bushels. So beans were also sharply lower that day, down by 20 cents per bushel.

For Missouri, our final corn estimates were put at 114 bushels per acre compared to last years 123 and total production was 349.9 million bushels, compared to last years 369 million bushels. On soybeans, they called our yield 36.5 bushels per acre versus last years yield of 41.5. Our total production was estimated at 189.8 million bushels, down from last years 210.4 million bushels.

So as I mentioned above, the market viewed the January USDA reports as bearish, but are they really? Let’s look at the ending stocks numbers. They put US corn carryout at 846 million bushels. This is the second lowest since 426 million bushels back in 1995-96! Last year we had corn well over $8 and last years carryout was 1.128 million bushels.

On the soybeans, our ending carryout of 275 million bushels is pretty much in the middle of the past 12 years. Last year we ended up with 215 million bushels and we had $14 beans. So, one can certainly imagine that these tight levels of ending stocks could in fact lead to higher price levels as we move through this marketing year.

But I would certainly caution that these ending stocks estimates will likely chang a lot more as we go through the calendar. Many analysts are projecting that we could see ending bean stocks as high as 350 million bushels. And even at these price levels, there continues to be some demand rationing of corn supplies. So as is typical, the future price trends are very unclear. We are still faced with many outside factors impacting our commodity world. I would continue to urge our producers to know their costs and to

pick their marketing price levels at where they will make additional cash sales and use our offer contracts.