Summary

The headliner of the day was the release of the USDA Weekly Crop report and Supply and Demand estimates. As would be expected over a week that was shortened because of the Labor Day weekend with a backdrop of slightly lower volume, Market Movers were able to prop up the prices of Corn, Soybean and Wheat heading into the weekend. December Corn closed the week with a solid 3.81% gain or 12.40 cents. March Corn kept pace adding 13 cents of its own for the week (or 3.84%). Not to be outdone, November Beans rose 27.75 cents or 2.91% and Jan Beans grew 28.5 cents (2.98%). December Wheat recovered some after two big down weeks rising 1.06% or 4.25 cents.

We have previously shared how important it would be to Managed Money to convince the average producer and the novice investor that prices would move up significantly from recent lows. Each day the market rose last week we saw evidence that market participants were increasingly more willing to “let things ride” and hope for higher prices instead of taking advantage of levels that were already profitable for them. This is exactly the kind of emotional euphoria that Managed Money is able to take advantage of. Once the average producer is convinced that the market is going higher and that there is not real need for a ‘Risk Management Protocol’ you can guess that a high is probably around the corner. It is during these windows of opportunity that Managed Money systematically unwinds their positions and the average trader is only able to respond after the fact. They wait for evidence from the likes of the CFTC’s COT report but again that is sometimes too late.

The industry was looking for today’s report to trim Corm production estimates as well as a reduction to the Beans ending stocks because of weather complications. Even though Wheat was up on the week, it’s trading range over the past two weeks has been very narrow. Per the USDA Report today the Soybean Crop production came in at 4.201 Billion Bushels (BB) versus 4.060 BB last month. The trade estimates were between 4.019 to 4.162 BB. Futures were up ahead of the release but that was short lived and futures were down more than 20 cents over the course of intraday trading. Corn production was at 15.093 BB down from last month’s 15.153 BB figure. It was right in line with trade expectations that ranged from 14.757 to 15.30 BB. US Soybean Yield was strong coming in at 50.60 Bushels per Acre (BPA) well above last month’s 48.9 BPA. The trade estimates were from 48.1 to 50.1 BPA. US Corn Yield was in line with expectations at 174.4 BPA below the 175.1 last month. The trade was calling for somewhere between 171 to 175.6 BPA.