Friday’s USDA reports caught traders off guard. Expectations for larger corn supplies were dashed when the USDA cut its projected yield for the 2013–2014 U.S. corn crop from 160.4 to 158.8 bushels per acre, reduced the estimated crop size by a half-percent to 13.925 billion bushels, and raised projected corn usage. That said, the crop is still the largest by far on record, besting the previous record crop of 2008–2009 by 6.3 percent.

Chicago corn futures, which had traded down from $4.27 per bushel to $4.12 per bushel before the report, bounced back to close at $4.32 on Friday. But to keep prices in perspective, that compares to the 2013 high of $7.41 on March 14.

The USDA also raised its outlook for both U.S. and global wheat supplies, reflecting less wheat use for U.S. livestock feeding and larger Chinese and Russian crops. Chicago wheat futures that were $7.00 in late October closed at $5.69 on Friday.

Contact John T. Barone at jbarone@mktvsn.com.