As expected, the USDA trimmed the U.S. corn yield estimate in the July World Agriculture Supply and Demand (WASDE) report, but by a lower volume than traders were anticipating. The average U.S. corn yield estimate now stands at 177.5 bushels per acre, down 4 bushels from June. Total crop size was bumped up to 15.32 billion bushels, as harvested acres increased 2.2 million following the USDA's June planted acres revision. 

This level of production was above the average trade estimate, and given the recent improvement in crop conditions, we may see an even higher production number in August. Old crop ending stocks were left unchanged at 1.4 billion bushels, down 50 million bushels from June.

The USDA reduced ethanol demand by 25 million bushels and exports by 75 million bushels for this year but increased feed and residual use by 150 million bushels to reflect the tighter June...