Mike Pearson examines the update released last Thursday by the USDA in the World Agriculture Supply Demand Estimates report.

The report caught traders off guard with larger than estimated corn and soybean yields.

Corn market watchers were stunned to learn that the corn yield per acre went from 173.2 bushels yield per acre to 174.9 bushels per acre yield-- almost a two bushel increase. And production wise, this means the yield will be the largest in U.S. history-- beating out 2016 yield. The report showed the farmers were producing 15.234 bushels of corn this year.

The good news is that demand jumped in ethanol production, exports and feed for livestock.

The soybean crops also jumped three-tenth of a percent and will mean 82.2 bushels per acre yield. This will result in 4.13 billion bushels and 245 billion bushels total.

The one area that changed very little was wheat production.