Markets Will Watch Crop Tour Reports Closely

August 19, 2011 10:31 AM
 

This information is provided by Archer Financial Services, Inc. 800-933-3996.

The trade this week was dominated by declining yield ideas in corn, with most of the attention seemingly focused on Illinois’ crop prospects. The wheat market had a strong week on the back of lower acreage and yield ideas for the spring wheat crop, while the soybeans realized surprising and consistent strength all week long.

A Central Illinois co-op grabbed the mid-week headlines with an expected yield in their area of 148 bu./acre for corn compared to the USDA figure of 170 bu./acre for Illinois in its August production report. There is little question that the Illinois yield estimate is currently overstated.

The market will be relying on chatter from the country over the next few weeks until the next USDA report arrives, and there will be no shortage of that chatter as the Pro Farmer Midwest Crop Tour kicks of next week. Through the use of social media, the reports from that tour will be fed from the field to the market faster than we have ever seen. This will lead to very choppy trade.

Prices may grudgingly move higher next week on expected crop concerns and selling may be somewhat limited; however, at such lofty levels all markets are vulnerable to sharp but brief breaks as the global economic picture continues to be a potential albatross to the trade.

Expect the market to stay in a very tight range with good buyers on breaks and willing sellers on rallies. Traders should not get married to positions in this environment. One should be proactive in taking profits off of the table when they exist, as the market will likely provide several opportunities for re-entry.

 

 

 

 

 

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