CLOSING COMMENTS- CORN, SOYBEANS, WHEAT
  09/03/10 6:21:00 PM

9/3

Corn: A bullish corn yield estimate by Informa and strong technical 
buying sparked significant gains today. The market initially opened 
with small losses but rebounded on spillover support from the wheat 
pit which was up strong. However, it wasn’t until Informa released 
their production estimates did the market skyrocket. Informa’s 
final corn yield estimate was 158.5 bpa. This is well below trade 
guesses which are coming in between 162 and 164 bpa. This is also 
below the USDA August estimate of 165 bpa. If such a yield is 
realized carryout would dip below 1 billion bushels assuming static 
demand. Traders are concerned what a supply shock could do to the 
market after demand has remained brisk in spite of a 70 plus cent 
rally in the market over the past 6 weeks. The Informa news sent 
corn to new 14-month highs with the help of fund buying. The real 
interest didn’t start until December futures traded above $4.52. 
This put December corn into new highs for the year and triggered 
buy stops. The funds were estimated to have bought between 25,000 
and 30,000 contracts. Managed money already had added 33,000 
contracts of long position as of last Tuesday according to the COT 
report this afternoon. Their net long position is now 378,537 
contracts. The total speculative long position is 299,654 contracts 
according to the CIT report. The momentum and trend is definitely 
higher and if yield reports remain disappointing trade next week 
should be more of the same.

Soy Complex: Beans ended the day and the week higher on new month 
fund buying. Volume was large lead by corn which may have set a 
record volume day when trade had been anticipating a mostly quite 
day ahead of the 3-day weekend with traders expected to head out 
early. The day session started slowly but early price action in 
corn with the Dec contract making 9-month highs attracted technical 
buying across the Ag complex. Adding additional support to the 
market was Informa Economics production estimate for corn with the 
private analyst issuing a final corn yield estimate of 158.5 bpa 
versus USDA’s August record yield estimate of 165.0 bpa. It was 
Informa’s bullish final corn production estimate that helped beans 
rally to 2 ½-week highs with market concerned that if Informa sees 
corn yields declining from Sept to final – final US bean production 
could also be in jeopardy. Technically, today’s action sets the 
November contract up for a test of the August highs at $10.49. But 
trade will be closely monitoring yield results reported next week 
as harvest advances northward.

Hard Red Winter and Spring Wheat: US wheat futures, led by fund 
buying in Chicago, settled as much as 27 ½ cents higher closing on 
the highs of the session heading into a long weekend. Continued 
strength on Russia’s statement from yesterday that a ban on exports 
could last until next year’s harvest coupled with positive export 
news this morning sent the markets higher with MGEX and KBOT 
markets closing at one month highs while CBOT wheat closed at 3-week 
highs on the daily charts. In daily reporting, USDA announced sales 
of 275,000 MT of HRW to unknown and 110,000 MT of HRW to Egypt. 
Traders continue to factor in southern hemisphere dryness which is 
adding to market uncertainty. Strength also came from private 
estimate on lowered corn yield expectations. Technically, taking 
out Monday’s high as well as the two previous weekly highs helped 
trigger buy stops. The close at today’s highs looks extremely 
positive.