Good morning!

The markets appear to be taking a deep breath this morning (much-needed).  Most of this is due to good old fashioned pre-weekend profit taking. 

This rally we have seen has been one everyone should remember for a while.  Looking at yesterday’s close vs. the close just two weeks earlier… dec corn gained a whopping $1.58/bushel!  Nov beans over the same 2-week, 9-trading day window gained $1.55/bushel.  Talk about a game changer for producers’ bottom lines (at least those that plan to have a crop).

As hot and as dry as it has been – it is hard to imagine the US corn crop getting any worse in traders’ minds then it is has been this week (triple digit temps, no relief in sight).  Current general weather this morning shows cooler temps this weekend as a cold front moves across the Midwest.  Late next week there is a chance for hotter temps to show up once again, but it could also bring with it showers for the Southern Plains/Delta/Southeastern Belt.  This is helping the market work lower.

The USDA released its weekly export sales report this morning.  Corn sales came in well below guesses – actually coming in at a marketing year LOW.  That is not friendly to corn prices.  Bean sales on the other hand were somewhat impressive – especially in new crop.  That is a touch bullish to beans but likely won’t matter today.

The goal of the market is to slow down demand, especially corn demand.  If you pay close attention it may already be happening.  You can see it in decreasing corn exports, poor ethanol margins, and a basis that is backing off every other day.  A big rumor that was floating around the trade late yesterday was that the EPA is thinking about reducing the ethanol mandate for next year by 20%.  Really the whole idea is pure speculation – but these are the types of things that can turn a bull market around. 

Currently

Corn is 16 to 19 cents lower

Soybeans are 15 to 17 cents lower

http://www.fccoop.com/markets/information.cfm