The market was rather quiet today for corn and soybeans but we have the feeling it’s like a spring being tightened until it’s ready to pop. We may see some excitement before the end of the week but I believe it’s more than likely going to be postponed until Tuesday after Labor Day weekend.
It’s all about the crop size right now. We are starting to get a lot of field reports from crop scouts and agronomists walking the fields and the tone seems to be that no one agrees with the USDA numbers. They are all suggesting fields have too many holes, is too late and is turning yellow in many regions of the Corn Belt to post a 155-bu. corn yield. As for beans, the tone seems to be the potential still exists for a bounce but we are quickly running out of time for rain to have a positive impact. Right now it seems most of the crop scouts seem to be giving a bias to yields 41.5 bu./acre or lower.
All of this would suggest September could continue to be a very choppy price time period. My bias, the first of the month will be stronger and then weaken as we move into the end of month if no frost event occurs. As one looks forward, once the combines start to run the potential will develop for a sideways to higher price action into fall as producers are reluctant to sell off the combine due to wide basis patterns and perceived higher price potential.
I don’t talk about livestock much but I must point out the hog charts have not looked good for some time now as sideways trading base develops. Today’s breakout is now going to see the longs on margin call tomorrow. We would anticipate most will not want to go into the weekend with much risk so the weakness should continue into Friday. Downside target should be very close to the March lows. Near term one must be cautious in trying to bottom pick. The good news is once we clean up supplies and get most of the herd liquidation factored into the market I REALLY LIKE the potential of a long term bull market in summer of 2009.
Finally, we are going to take off a little early, no updates now until next Tuesday.
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