USDA’s January Supply and Demand Report had a few bullish surprises. The biggest was a drop in U.S. soybean ending stocks down to 440 million bushels verses 465 million in the December Report. Dean Heffta with Water Street Solutions says it came largely as a result of a lower production and acreage number.

The U.S. wheat ending stocks number at 941 million bushels was bearish as it was up 40 million from December. However, winter wheat seedings were down nearly 3 million acres from last year at 36.6 million.

USDA raised U.S. ending stocks on corn to 1.8 billion bushels due to sluggish exports and that was despite lower corn by .9 bushels per acre and that lower production at 13.6 billion bushels.

Heffta says however, funds are near record short in the grain sector and so much of the rally on Tuesday is tied to short covering and may not be a trend change.

World ending stocks were lowered for corn 3 million metric tons to 208.9 mmt, soybeans carryover was lowered over 3 mmt to 79.3 mmt, while world wheat numbers were raised to about 2 million metric tons.