This morning, USDA issued its monthly update to the World Ag Supply & Demand outlook for the 2009-10 crop year. It adjusted its 2009-10 corn yield forecast from 165.2 bushels/acre to 164.9 bushels/acre but also lowered export demand by 100 million bushels. On soybeans, the USDA maintained 2009-10 yields at 44 bushels/acre.

“Today's report was not unexpected, though mildly negative for corn prices as U.S. and global carryover were raised, reports Ann Duignan, analyst for JP Morgan.

“Overall, major crop receipts — corn, wheat and soybeans — are now expected to decline in 2009-10 ($96.2 billion, down 5% year-over-year vs. prior expectation of $97.5 billion, down 4% year over year). Today's report is likely negative for corn, soy and wheat futures. As such, the report may have a bearish read-through for ag equipment stocks, in our view,” she says.