The USDA released its October WASDE report last week.  

Dan Basse with Ag Resource Company says the surprise of the report was the decline in soybean yields under 50 bushels per acre and a smaller-than-expected drop in corn.

He notes the drop in soybean yield was not expected, and down a little lower than what traders were looking for.

"The USDA also cut combined corn, soybean, and wheat demand by 215 million bushels. Maybe that's the bigger story because, after the USDA report, the market rallied slightly, but has been declining since.  I think amid the world that is showing economic headwinds, that indeed the export cut is maybe a trend of the future."

He notes with the drought in the U-S FOB (free on board) costs for US corn, soybeans and wheat have climbed.

"If you bought beans, or corn, or soybean loaded on a vessel, that free onboard price today, or FOB as we call it is roughly $2 a bushel more expensive than similar grain being offered out of Argentina, Brazil, or Ukraine. In the case of wheat, it's $2.35 a bushel more than wheat offered out of Ukraine, or Russia, the Black Sea."

Basse says if you're a world importer and you're looking at price. US corn, soybeans, and wheat are extremely high-priced right now. 

"All of this is due to the Mississippi River, the US on a continental basis. We're now in the worst drought that we've seen, even worse going back to 2012 in terms of looking at the square kilometers or square miles involved in the drought. The Mississippi is now down at the lowest level since July 2012. So, it's at a negative flow, which means we're having to dredge to get barges downriver."