Corn and wheat posted solid gains while beans struggled today. December corn settled the day 7 ½ cents higher at $4.46 ¾. December Chicago wheat ended up settling 23 cents higher at $7.08 ¾. November beans settled 4 ½ cents lower at $10.05 ½.
Today's trade appeared to reflect the ongoing fears of lower yields for corn. We realize that the early reported yields have been disappointing but it is still too early to write off the corn crop. The US corn crop is maturing very rapidly, and we should see a record amount of corn harvested in the next 30-45 days. We believe this could put some strong downside pressure on the market during this timeframe. Even though we are bullish corn, there are a few things we are concerned about. Most participants in the marketplace are assuming we are going down in national corn yields from the last USDA estimate. So if national yields don't go down or in fact go up, it would be a huge bearish surprise to the marketplace. The next production report is on September 10th, even if national corn yield ends up being lower it may not be reflected in this report. With the marketplace holding near-record long positions and with a rapid harvest pace likely, we could easily trigger a larger sell-off than expected. We like our current hedge positions at this time.
The bean market struggled today due to the stories that China may be releasing reserves ahead of harvest and better than expected bean yields. In our opinion we have a very solid bean crop. The yields that we have been hearing have come back better than expected. Coupling a strong bean crop in the United States and poor crush margins in China the bean market may continue to see pressure. We still feel very strongly that bean sales up at these levels are a good idea going into harvest. If you need to catch up on our current recommendations or would like to add additional protection as we progress into harvest, please get in touch with your broker.
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