The May World Agricultural Supply and Demand Report was a mixed bag for the market.

The trade was gearing up for a very bearish corn carryout with farmers planning to increase corn acreage to 97 million acres in 2020. The demand hangover from COVID-19 was also expected to contribute to slowing ethanol and feed demand. Yet, the U.S. Department of Agriculture projected corn production for 2020-21 at 15.995 billion bushels, but ending stocks came in below expectations at only 3.318 billion bushels.

It was due in part to a 375 million bushel increase in exports and a 245 million bushel increase in food, seed and industrial use as USDA anticipates a normalization of gas demand with a return if ethanol production levels to status quo. This is still 1.2 billion bushels above last year’s carryout and one of the highest since 1987-88. Carryout for 2019-20 was also below estimates at only 2.098 billion bushels and just 6 million bushels above the April figure.

Matt Bennett, market analyst with, isn’t predicting for the corn market is in yet though. Corn is getting planted early across the U.S. and he says that may translate into higher yields and production. Plus, the expectation that fewer acres of corn would be planted with the lower prices may have been negated somewhat by the attractive planting conditions.

United States soybean production for the new season was in line with trade expectations at 4.125 billion bushels. USDA used the 83.5 billion acreage figure from March intentions and a trendline yield of 49.8 bushel per acre to reach that total. However, ending stocks for 2020-21 were only 405 million bushels, which fell below the average trade guesses.

USDA says a 375 million bushel increase in exports, including additional China demand, was part of the reason for the tighter balance sheet. That number was even more of a surprise considering the agency raised old crop ending stocks by 100 million bushels from the April projection to 580 million bushels. Some of that increase came from a revision in last year’s production to 4.72 billion bushels.

U.S. wheat production was pegged at 1.866 billion bushels, which was not a surprise to the trade. The all winter wheat production figure was projected at 1.255 billion bushels, hard red winter wheat at 733.4 million bushel and hard red spring wheat at 298 million bushels. However, new crop ending stocks on a domestic basis were set at 909 million bushels, well above estimates. At the same time, old crop carryover came in at 973 million bushels, just 8 million bushels above April.