We continue to see what appears to becoming a bit of a tradition over the last few years with the moving of the entire allowable daily limit.

Unfortunately on this occasion the limit was down with the March contract dropping all US 36 cents a bushel to US$6.05 a bushel.

This was despite continuing concern around the South American corn and soybean crops particularly in the big cropping regions in Argentina and Brazil, which has seen helped push the market up over the last couple of weeks.

The report has suggested that that current world wheat

stocks are currently at the second-highest level, a dramatic turn around in the last two years.

This can be largely attributed to the fact that the Black Sea crop rebounded from a 60 million tonne drought-affected crop in 2010 to over 100 million tonnes last year.

The report has also highlighted larger US plantings of wheat and corn.

Approximately 41.9 million acres, the largest area in three years, is expected to be planted for wheat while corn plantings are expected to be the largest in 60 years.

This will likely come with a reduction in canola and soybean plantings.

Regardless some analysts are suggesting that the USDA Crop Report is a bit optimistic with production figures being on the high side, not fully taking into consideration grains usage, particularly going into the feed market as a result of higher corn values.

The trade is also widely suggesting that the small decrease recorded against corn stocks did not fully account for the actual position and brings into question the USDA’s methodology in creating the report.

This is further illustrated as speculators were taken by surprise with the report, particularly those that had taken positions in the last week expecting that this report was going to be more bullish than bearish.