Highlights
The Pro Farmer numbers were definitely bullish for corn and neutral for beans. With December corn up 14¼ Friday and November beans up 30, there is room for corn to move higher based upon the report, but the market will not accept Pro Farm’s corn number and it sees the bean number as neutral at best for Sunday evening’s opening.
The market probably will price-in a corn yield of 173 to 174, but certainly not 169. If the USDA were to confirm 169 on the September 12th USDA Crop production Report, then it would be reasonable to expect new highs in the corn. However, the probability of USDA dropping yield by 7 to 8 bushels in one month is near zero. We expect USDA to be in the 174 bushel yield range, which would make it a neutral report. But the final factor, as always on corn and beans, is the carryout. What changes will USDA make in domestic and world demand? The answer to that question will determine price direction. We fully expect a price correction down to the gap area at $6.31 on December corn before the USDA numbers are released on the 12th. When? Probably by the middle of this week. Will the gap be filled?