Daily Commentary:
9/3/2010
A very wild ride in the market today.  With overnite markets quiet steady to a little lower, it looked as though it was going to be a quiet day ahead of the 3 day weekend.  So much for that!  Informa came out with their yield estimates and had corn at 158.5 bpa, which would put the carryout below the 1 billion mark.  The bulls got ahold of that information and ran with it.  Bean yields were estimated at 44.1 and we managed to trade up 26 cents today.  Both corn and beans closed near the highs for the trade today.  Farmer selling was heavy today also.  This was a very impressive move today and very good closes as well.  Wheat was also up 23 on the day.  Lets see if we can improve more on Tuesday.....

9/1/2010
September already.......really ??   Wheat and corn firm, soybeans weak.  Germany bought a dab of U.S. milling wheat (660,000 bushel) and wheat took off to the upside.  Their crop quality has gone downhill due to too much rain at harvest.  They have plenty of bushels but a lot of them are now feed wheat instead of milling wheat.  Friendly wheat, maybe, but their feed wheat eventually goes into feed channels providing competition for corn.  Corn continues to try and work higher.  It appears managed money is intent on testing last January's highs arund 4.50 Dec.  The farmer has plenty of bullets at that level and higher so IF achieved, we could see a very quick setback from those levels.  Dec will have support back around 4.28 (4.46 close today) and again at 4.15 area.  Beans don't want to participate in the rally and continue to be the short leg of spread activity.  If beans are seeing good yields everywhere, even in the driest areas of the delta, is it that far-fetched to believe corn won't?  The trade is convinced that the national corn yield is closing in on 160 bpa rather than USDA's projection of 165.  I'm not convinced.  The worst corn is getting harvested first and that's what the trade is focusing on.  Time will tell....stay tuned.

8/31/2010
Everything traded higher much of the day, rejecting overnite weakness.  There wasn't much news in the market today.  Beans appeared to be the leader early but when they showed signs of weakness (crude down over 2 bucks) the wheat did as well.  Eventualy they both gave way to the downside finishing on the lows of the day.  Corn was supported more so than wheat and beans on what may have been intermarket spreading; buying corn and selling the wheat or beans.  Once again the bulls have to be a little disappointed that they can't move the corn market substantially higher even though they are doing a LOT of buying.  Record long positions are currently held by the spec fund.  The farmer continues to sell the rally as well he should.  Corn may be due for some liquidation pressure before long as we head deeper into harvest.  

8/30/2010
Wheat was the leader early in the day with chicago trading over 30 cents higher and Mpls around 29 higher but wheat faded during the session and only closed up 7-9 cents.  Beans traded higher early but closed 3-4 lower.  corn felt like a sell-off may be coming late but it never materialized, closing up 4-6.  Maybe the trde wants to get a look at crop ratings tonight before turning selers.  The farmer was engaged today and a LOT of sell orders are stacked up in Dec corn from 4.46 to 4.55.  todays high was 4.45.  That should keep a lid on prices.  Early harvested corn is getting reports of disappointing yields and that continues to support the bull.  One has to believe, however, that there is a reason those acres are getting harvested in August and it is NOT representative of everything that is out there.  this afternoon got two results out of IN showing corn yields above last year.  Crop ratings came out at 3 pm...unchanged on corn and beans.  That's likely a bit negative.......


8/27/2010
Beans were almost the leader today as traders seem nervous about the lack of moisture in the eastern and southern areas of the corn belt.  I'm hearing 70+ bpa on irrigated beans in LA, and MS (as hi as 83) and 40 bushel dryland.  The irrigated is well above a year ago and the norm and the dryland is better than a year ago as well.  Pod counts were huge on teh Pro-farmer tour, as much as 20% above average in the upper midwest so I think we have a big bean crop coming and current values are a selling opportunity.  We're also encouraging more acres in S.A. Corn had a higher close but disappointing, not being able to close above resistance.  I'm a seller up here... 

8/26/2010
Corn, wheat, and beans all higher on the day after a few days of liquidation, especially in the corn.  The funds are certainly trying to defend their positions but they are still record long in corn and it just doesn't seem likely that they will carry that position thru harvest.  Still, we could have one more attempt to try and take out overhead resistance, 4.39 Dec, which is now 7 cents above the close today.  Farmer selling likely kicks in if that happens, keeping a lid on the rally and setting the stage for a sell-off to find our harvest lows as harvest progresses over the next several weeks.  Beans were a follower to corn and wheat and will continue to be with abundant U.S. and world supplies.

8/25/2010
Not much happening in corn and beans today.  Both of them traded both sides of unchanged but in relatively narrow ranges.  Funds were were big sellers yesterday with corn down 12 at the close but after testing lower values overnite and again this morning we're managing to hold support in the Dec contract from 4.18 to 4.20......barely.  If we see a close below 4.16, technically it opens the door to test 4.00.  Beans are hanging on by a thread.  A lack of rainfall in the eastern corn belt and delta the last week or more and not much in the forecast is providing support.  Meanwhile, values and the gulf are slipping hard as harvest progresses down there.  Mississippi irrigated acres have yielded as high as 80 bpa.  Wheat was the dog today, down 15 in Mpls.  Egypt bot non-U.S.

8/24/2010
The bulls got kicked squarely in the you know what today.  Yesterday morning felt like most traders were of the opinion that corn would never go down again.  So what does corn do?  Trades 4 cents lower yesterday and 12 cents lower today.  Outside markets were certainly a feature with crude oil down another buck or more, and the DOW testing 10,000 once again.  Housing data disappointed once again as well as a slew of other numbers that keep telling us the recovery is a very, VERY, slow process.  In that environment, which is worldwide, can demand for corn, beans, and wheat stay at a constant level or even increase as many traders suggest?  Doubtful.  Crop conditions for corn improved yesterday as well casting a bearish overtone to the market as well.

8/23/2010
In true "kick'em when they're down fashion", the BNSF moved up their scheduled rate increase for corn shipments of 1 cent per bushel in January, to cents per bushel starting December 1st.  This is on top of a 2 cent per bushel increase effective October 1st.  Starting to hear other input costs for corn starting to work higher as well.  Maybe not 2008 type increases but nobody wants to be left out of the next boom in Ag income if you believe the numbers that the trade is kicking around.  I still happen to think that with weak world economies and crude oil already at much higher levels than 2008, it won't take much of a spike in corn prices hurting demand a lot faster than we did in 2008.  I'm cautiously optimistic for prices going forward but I'm not a raging bull today.

8/20/2010
Today's trading pattern followed one established earlier this week with corn higher and beans and wheat lower.  For the week:  corn is up 9 cents, beans down 40 and wheat down 11.  Pro Farmer tour pegs the corn crop at .9 bpa under USDA, and the bean crop at 44.9 bpa, .9 above USDA.  That was their theme all week, a slightly smaller corn crop, bigger bean crop, and the trade is apparently positioning for the same.  Between the index funds and the spec funds they now own on paper, approx. 40% of this years production. Wow!  Who's there as buyers when they decide to sell, esp if it comes at the same time as the farmer starts to sell off the combine as harvest picks up steam?  Good rains are forecst for the driest areas of the south and eastern corn-belt this weekend and again a week out.  If realized, it should be bearish prices as we head into harvest.  Downside potential on corn maybe 20 to 30 cents, on beans maybe another 50-75.  Longer term, corn should have the most upside potential but then again, I'm not convinced the crop is smaller than 165 and we also have to watch demand.  In the last two weeks corn is up about 22 cents while cruide oil is down about 8 bucks a barrel.  That trend can't continue too long or the ethanol industry starts to bleed hard.....

8/19/2010
Exports for corn, beans, and wheat reported this morning for last week were huge, at or above trade estimates.  Biggest in 15 years or more for any one week.  What does it all mean?  The biggest question is this demand a one or two week blip due to concerns about getting the winter crop planted in Russia, Ukraine etc....or will the demand be sustained throughout the year?  With world economies still struggling it seems that demand expectations are a bit too big, especially considering recent price increases.  Ethanol margins can change to negative quickly as corn rallies and crude oil stalls or falls.  Will demand stay constant for beef and pork nearing life of contract highs?  Doubtful.....Look at the carry in the corn market as June 2011 corn was 4.00 today for a while.

8/18/2010
After dropping over $1.50 from the highs on August 6th, Mpls wheat bounced a whopping nickel today.  The ridge in Russia and other Black Sea areas is breaking down and it appears winter seedings will get the needed moisture.  Their winter seeding starts mid-September.  Beans traveled a wide range overnite and again during the day session.  Down 18 in early trade, they battled back near unchanged but sold off again late, closing down 11.  The pro-farmer tour in general is seeing corn equal to or a bit below a year ago but beans mostly above a year ago on pod counts.  That probably supported corn again today, as corn traded from down 6 early to a close up 3 cents.  Dec corn is a nickel or so away from highs put in on Aug 5th.  Funds are huge longs.  Feels toppy...

8/17/2010
The corn and bean bulls got their way today as they pushed the market higher after yesterdays poor technical performance.  Wheat was lower on the day once again today but corn and bean buyers ignored it.  Right now, traders are running with any piece of bullish news they can find and totally disreagard anything with a bearish tone.  Fund positions are near record longs so we can definitely see a major sell-off prior to harvest but time will tell.  Farmers will be willing sellers on any additional strength as we will be into new highs for both corn and beans.  Reports of sudden death syndrome in Iowa bean fields was the hot topic for today.  Traders also fear that the corn crop was pushed to maturity too fast and that yield will suffer as a result.  Don't count out genetics!

8/16/2010
Todays higher trade and lower close may be the turning point for the grain markets as we inch closer and closer to harvest.  Funds have been building long positions for some time now and are approaching record positions in corn and beans.  Corn and beans traded higher all day on a slow grind higher even though wheat was down 3 to 6 cents.  When wheat broke hard over the noon hour corn and beans broke as well.  The ridge over the Black Sea area seems to be breaking down with cooler temps and more chances of rain in the forecast.  Not that it affects crops in the field much, but at least winter crops have a much better shot of getting planted with moisture coming.  A lot of bulls are still in the corn market.  Support at last weeks low, down another 15 cents or so.

8/13/2010
Wheat sold off late in both Chicago and Mpls but that didn't stop beans from rallying to new highs for the day into the close.  Beans were the price leader today and that's somewhat odd as they have the most ample balance sheet around the world from a stocks-to-use ratio.  New recommendations are coming out as to buy corn and sell wheat and that could have been some of the force with the higher corn board today as well.  If you didn't realize it, the last two days have been the highest closes on nearby futures since last January.  Tip your hat to the fund managers as they are nearing record long positions for corn, beans, and wheat.  Doubt they hold those positions into harvest which will pressure the market at some point.  Plan accordingly.

8/12/2010
Another USDA report day.  On the surface, there was nothing blatantly bullish with todays numbers.  Corn production was raised to 165 bpa, beans to 44 bpa.  Corn carryout for our current year came in at 1.426 bil bushel, a little under trade expectations while the new crop carryout came in at 1.312 bil bu., slightly higher than the avg trade guess.  Beans were similar, 160 million old crop carryout, slightly less than expected, and 360 mil bu new crop carryout, more than expected.   Let's discuss the corn and wheat first.  One of the headlines today was that USDA "shocks" traders with world wheat carryout at 179 mmt.   That was a misleading headline as what was shocking was that USDA cut the Black Sea wheat production as much as they did this early.  It's pretty much in line with what Russia and Ukraine has already told the market for two weeks so the number itself has already been traded.  Interesting to note that 179 mmt world wheat carryout is still the 2nd highest c/o in the last 8 years.  A very adequate supply.  The U.S. wheat carryout is pegged at 952 million bushel on new crop, down from 973 mil bu old crop carryout.  An adequate U.S. carryout arond 500 million bushel.  Overall, at this price, wheat is hardly a bullish story.  Higher prices will curb demand and yet the fund managers only want to discuss the potential for a cut in supply, not a cut in demand.  Russian wheat areas will be monitored closely in the weeks ahead.  Moisture will be needed eventually to make sure the winter wheat crop is seeded in good conditions.  The corn situation is somewhat similar to wheat.  Traders want to focus on demand and think that it is understated by the USDA but only because U.S. corn values are cheaper than world wheat values.  It doesn't matter if noone wants the corn.  (Sorghum production increased substantially in the U.S. this year and is also a substitute in the world market)  Time will tell on the export demand but we also have to be very aware of both our ethanol sector and livestock sector.  Crude oil today was down over two bucks again while corn was up 11 cents.  Too many more days like that and ethanol profitabilty goes down hill in a hurry.  Big picture with corn however that many traders are focusing on is that after two years of record production in the U.S. we still have carryout declining.  That puts long-term support underneath our market.  Talk of an acreage battle brewing this spring will also keep a live bid underneath the market.  Take a look at your overall sales today.  If you are comfortable with the amount of sales you have on today and are covered thru early January I would say remain patient as we likely see these levels or higher after the first of the year.  In the meantime, however,  I have to believe we will eventually see the funds liquidate a large part of their positions sometime ahead of harvest.  They have extremely large positions and to carry them into and thru harvest would be highly unlikely based on past history.  Not too many traders seem to respect the downside in the market today but that can change almost instantly once selling is triggered.  Regarding beans, once again I have to admit that the strength in the bean market is more than what I thought it would be this late into the season.  Even with the U.S. carryout increasing substantially and world carryout at high levels, traders are unwilling to sell the bean complex if corn and wheat hang around.  It is interesting that USDA is anticipating smaller crops in South America next year even though we're hearing today that wheat and corn acreage may be down, and bean acreage up.  Some traders believe that USDa is factoring in a smaller yield due to possible La Nina conditions.  Either way, they are being conservative in their estimates today.  Beans continue to have the most downside risk of all our markets going forward but again, likely won't sell off unless  wheat and corn do also.  
One word on acreage......I've talked about this before but the trade doesn't want to embrace this fact either.  According to the USDA, total acreage planted in the U.S. this year was down 6 million acres form 2008.  In addition, we've had over 3 million acres come out of CRP and are available for production.  Combined, that's over 9 million additional acres just in the U.S. that can be planted either this fall or next spring.  In addition, the recent rally in wheat of over 3.40 per bushel will likely draw additional acres around the world.  Give the farmer incentive and he will maximize production. 

8/11/2010
Action on both sides of corn and wheat while beans traded lower all day.  Profit-taking and position-squaring ahead of the USDA report had most traders selling today but there were some buyers in corn showing up as some of the moisture was taken out of the southern states in the updated forecast.  Everyone has their attention on the heat that hit the corn-belt this week plus the heavy rains across Iowa yesterday.  Just about everyone expected crop ratings to deline Monday night based on the heat from last week and yet they were virtually unchagned.  With ratings above a year ago, the argument is for USDA to raise yields in tomorrows report.  They're typically a bit conservative on demand so a neutral to bearish report is possible but traders may be reluctant sellers regardless of what the report tells us unless the yields are well above current estimates.

8/10/2010
Wheat continues the sell-off as traders take profits on long positions.  Corn and beans faded all day closing near the lows.  The NWS forecast is verifying and putting a fair amount of moisture into the center and southern parts of the country where it's been warmest/driest.  Cooler temps will prevail across much of the nation next week aiding in pod and kernel fill.  Beans likely have the most downside risk going into harvest.  Large questions remain as to overal feed and grain demand that will affect corn and wheat values in the coming months and help to add support.  There's been talk of brewing acreage battle coming this winter but we have plenty of acres to add in this country (over 9 million by my count vs 2008)  and plenty of incentive looking forward.

8/9/2010
Corn and beans traded higher much of the day but faded late.  Updated noon weather maps seem to confirm the NWS 6-10 day and 11-15 day maps which suggest below normal temps and above normal precip for most of the corn belt.  That would be huge for corn and bean filling as we get into late August.  Wheat traded two sides but had a sloppy finish as well.  Many parts of the Black Sea wheat remain warm and dry but you can only kill a crop once.  (I think the market already killed it a couple times)  Regardless, todays lower close in wheat should verify that Fridays limit down move of 60 cents was no fluke and it should be a warning for the longs to take profit.  The nearby Aug bean contract was down 12 cents today.  It appears traders are content with old crop stocks, and carryout.

8/5/2010
Chicago wheat started 60 cents higher and finished there.  Corn and beans started 19, worked a little higher, but faded much of the day and barely closed on the upside.  A tale of two worlds.  As someone said today there is more demand for wheat futures than there is cash wheat.  That's a problem that the CBOT has tried to correct but so far to no avail.  Export sales were decent across the board this morning, adding some support.  Weather is pretty decent across much of the nation.  The wheat market is kind of like duck, duck grey duck.  You hope to be able to grab the last chair as when it starts to correct it could be bloody.  Most everyone agrees that these levels are unsustainable including the Canadian wheat board. 

8/4/2010
Another wonderful day in the world of wheat.  With rumors still flowing about Russia and their drought and a little help also with the Delta being hot and dry the markets surge higher today.  I am not sure anyone has a clue where this market is heading anymore.  It seems to be day by day.  Corn closed at its highs for the day up a dime, about 4 cents off its Mondays highs.  Beans close a nickel off its highs, which is also the high from Monday.  Informa comes out tomorrow mid-morning with thier yeild estimate.  Thoughts are corn around 165.8 bpa and beans around 43 bpa.  Lets see what wheat decides to do tomorrow, it's anyones guess.......

8/3/2010
Overall a pretty quiet day in the markets.  Corn and beans both started the day lower and managed to battle back throughout the day.  Corn traded as much as a nickel lower and managed to close unchanged.  Beans started the morning down a dime and closed up 7 at about its highs for the day.  WIth wheat trading 16 lower today, I would have to say this was a good close for the other grains.  One thing that might have helped us hold these levels is the heat throughout the midwest.  Some places reaching over 100 degrees has to offer some concern, even though the high humidity should keep moisture concerns at a minimum.  Lets see if we can continue the up trend tomorrow.

8/2/2010
After a very strong overnite and morning session gains were erased quickly.  With the Russia wheat market still being the leader it is hard to know where this market is heading.  Corn traded up as much as 11 cents this morning, but closed as its lows down about 2 cents.  Beans traded up about 24 cents and managed to hang onto a nickel gain.  Wheat was the story and traded up as high as 50 cents in Chicago and closed up about 32 cents.  This is looking to be a volitile market here for a while.  The worry is still that exports are going to have to be high in the U.S. next year to make up for Russia's drought.  Oh by the way Russia sold Egypt 180,000 ton of wheat over the weekend.  I thought they were not going to have any extra wheat due to the drought???