The USDA released its July WASDE (World Agricultural Supply and Demand Estimates) report on Tuesday.

Dan Basse is President of AgResource Company in Chicago.

"The report, as is typical in July, didn't have a lot of fan fare," he said. "We saw that the USDA lowered their feed residual estimate in corn and raised end stocks by 25 millions bushels. Then they adjusted both corn and soybeans relative to the seedings estimates that came out in late June. As we look at it up 400,000 acres in corn, down 2.6 million acres in soybeans. However, in the soybeans they did cut crush and exports and also lowered the Chinese imports and old crop position to 90 million metric tons. That weighed on the soybean market but in the background of all of this has been of course the recessionary fear in the United States and inflation, what the fed will be doing."

Basse notes crops are struggling in some areas south of the border.

"It is not a year in which we would expect trend line yields. Temperatures have been too warm. We've had too much dryness across key states like Kentucky, Indiana, Ohio, half of Illinois, and then we've had this extreme heat throughout the spine of the United States including Texas, Oklahoma, Kansas, Nebraska, and then moving over to Arkansas and Missouri. Those crop areas produce about four billion bushels of U.S. corn, 1.2 billion bushels of soybeans. Not a lot of rain for the next two weeks and the temperatures will be extreme. In a grand total of things, it looks like the U.S. crops will struggle as they head to the home stretch during the month of August."