Mike Pearson tells us how the market reacted to the global balance sheet released by the USDA last week.

In the past two weeks, traders expected changes to corn and soybean supplies.

Traders expected the USDA to announce yield declines due to excessive dry conditions in May and June.

Traders got a surprise last week. They were expecting the USDA to announce a five bushels an acre decrease for corn and half a bushel for soybeans.

However, the USDA got a big surprise when they announced a four bushel an acre decrease and no decrease in the expected soybean yields.

With the acreage and yield questions out of the way, this meant record large production of soybeans and corn are expected this fall. This sent prices falling on July 12 when the reports came out.

But new crop corn and soybean prices were back above Wednesday's lows on Friday.