May Corn could trade lower as the USDA has forecast an increase in World Corn Reserves. The growing global recession, tight credit markets, falling crude oil and a strong U.S. Dollar have hurt demand. Speculators have been driving this market higher in anticipation that a breakout rally in crude oil will stimulate demand for corn used for ethanol. If OPEC does not cut production then this scenario is unlikely to take place. Furthermore, a stronger Dollar will continue to keep a lid on global demand.

Lower worldwide consumption for soybeans was down leading the USDA to increase Global Soybean Inventories to 49.95 million tons. This is likely to keep downside pressure on soybeans in addition to the stronger Dollar.

The May Wheat market could get interesting. The recent drought in the Plains is adversely affecting the winter wheat crop. This has been bullish news. The USDA however increased its estimate of global inventories. With the news mixed and the inventory news dated, look for the rally to continue as more crops could be damaged if the drought intensifies.