The July USDA Supply/Demand Report gaveth and it taketh away. On the giving side, as far as the markets were concerned, USDA lowered its 2015/16 corn production forecast by 100 million bushels to reflect lower planted and harvested acreage in the June 30 Acreage Report.

But USDA also reduced feed and residual use and exports by about 50 million bushels while raising corn consumption for ethanol by 25 million bushels because of an expected increase in gasoline sales projected by the Energy Information Administration.

Soybean stocks were also reduced by 75 million bushels, which was enough – along with some better news on the international monetary front – to trigger a rally in the Chicago grain futures trading pits.

Corn futures rose following the release of the report Friday (July 10) with July corn closing at $4.27 a bushel and September at $4.34 per bushel or both up 6 cents per bushel. That’s a far cry from the average futures prices farmers became accustomed to in 2012 and 2013 but still better than $2- or $3-per bushel corn.

Analysts for Farm Futures, a sister publication to Delta Farm Press, attributed part of the gains in corn and other grain contracts to improved perception of how the debt crisis in Greece and the stock market collapse in the People’s Republic of China might play out.

“What a difference a few days make,” analysts for the magazine said. “Earlier this week, grain futures were in retreat, and they weren’t alone. Investors around the world shed risky investments from stocks to soybeans. Fears Greece was leaving the Euro Zone compounded relentless selling in Chinese stocks that fed anxieties.

Greece issues resolved?

Since then, Greece has appeared to accept most of the demands of the European Union’s Central Bank and the Chinese government’s efforts to shore up share prices finally appeared to be gain traction. The sense of relief spread to the commodity markets, in part, due to some bullish surprises in the July 10 Supply/Demand Report.

Besides reducing the 2015-16 production forecast, USDA also said ending stocks for 2015-16 will be 172 million bushels lower. The projected season-average prices received by producers for 2015-16 will be higher for all the feed grains with corn up 25 cents to $3.45 to $4.05 per bushel.

Reflecting the increased interest in grain sorghum due to exports to China, USDA’s World Agricultural Outlook Board projected higher grain sorghum use. Ending stocks for sorghum, oats and barley were also increased due to larger plantings of those crops.

Altogether, global coarse grain supplies for 2015-16 are projected down 4.3 million tons with much of the reduction from lower corn beginning stocks in the United States. Foreign coarse grain beginning stocks are also lower with Brazil corn stocks down 1.5 million tons. Brazil corn exports for 2014-15 are increased, outpacing this month’s increase in 2014-15 production.

Globally, corn production for 2015-16 is lowered 2.2 million tons with reductions in the United States and EU only partly offset by increases for Brazil and China. EU corn production is lowered 2.4 million tons as recent excessive heat and developing dryness across major growing areas reduces yield prospects.

Cotton forecast unchanged

USDA did not change its 2015 U.S. cotton production forecast of 14.5 million bales. The Department’s National Agricultural Statistics Service has said it was re-surveying acreage in four states due to adverse weather conditions. Since then, some areas thought to be impacted by flooding are reporting much better crop progress than expected.

It did raise domestic mill use and export projections slightly. The 2015-16 marketing year (August to July) ending stocks were reduced 200,000 bales to 4.2 million, which is where the World Agricultural Outlook Board started the new marketing year with its forecasts.

U.S. soybean production was forecast at 3.89 billion bushels, up 35 million due to increased harvested area, which is forecast at 84.4 million acres. The soybean yield was estimated at 46 bushels per acre. (USDA’s first survey-based yield estimates will be made in the August crop production report.)

U.S. soybean crush for 2014-15 was raised 15 million bushels to 1.83 billion on increased domestic soy meal use, according to USDA. Soybean exports were projected at 1.83 billion, up 15 million, reflecting increased shipments and outstanding sales through early July.

Seed and residual use were also raised based on indications from USDA’s acreage and grain stocks reports. Soybean ending stocks for 2014-15 were projected at 255 million bushels, down 75 million from last month.

Rice down slightly

USDA lowered the 2015-16 crop rice supplies 11 million hundredweight to 278.4 million due to a production decrease in this country. Supplies of long-grain rice were lowered 12.5 million, but medium- and short-grain rice supplies were estimated to be up 1.5 million.

Total U.S. rice production was lowered 12.0 million cwt to 207.0 million due mostly to a decrease in area with long-grain production reduced 9.5 million and medium- and short-grain rice lowered 2.5 million.

For more on USDA’s July Crop Production Report, click on http://www.usda.gov/oce/commodity/wasde/