This is one of the most important weeks of the year for the soybean market. Soybean prices typically go higher during August and the first week of September. This year's market, with a combination of excellent rains over much of the soybean growing area and projected carry over that is near record large, overcame positive seasonal psychology. Prices are down sharply.

In previous years, regardless of whether the price rallied or not, the down move following the September crop report has the highest odds of any seasonal trend during the marketing year. History shows that soybean futures prices dropped 17 of the last 19 years from the day of the report through the third trading day of October. The notable exception is 2003 when anticipation of reduced yields due to drought in August caused prices to rally 55 cents. In no other year since 1980 did prices go up more than 18 cents.

Unfortunately, cash soybean prices are now so low that forward contracting will result in returns below loan rate in most locations. Even though the odds are almost 90 percent that prices will drop after tomorrows report, there is risk in selling at this point. If prices would go higher, you have locked in a loss with the possibility of no LDP.

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There are two possible ways to deal with this unfortunate situation. The first is to sell futures for short-term speculation, anticipating holding the position only until harvest. This leaves you trying to pick the harvest low to take your profit from the sale. You will be trying to pick that low anyway to get the most LDP.

The second possibility is to wait to make sales until the 'dead cat bounce'. Last year, the high of the bounce was greater than the high the day before the crop report. In that case, waiting was better than selling ahead. I fear that the negative psychology caused by huge anticipated ending stocks next year could cause futures prices to drop even further before the rally following the harvest low. My preference is to market a portion of the crop using each of the previous strategies. This approach at least spreads the risk.

This is one of my favorite times of the year. Last weekend was our local 'King Korn Karnival' here in Cass County. It is the oldest continuous local festival in Nebraska. Seldom have we had as much rainfall in August as we did this year. Unfortunately, the Saturday night parade was cancelled because of the rain that day. Most people were just happy for the moisture. The lawns are beautiful and we anticipate one of the best soybean crops ever. The mood at this celebration was as festive as I can ever remember.

Husker Harvest Days will be this week in Grand Island. I will be in the University of Nebraska Building at 3 P.M. on Wednesday with the rest of the Market Journal crew. Stop by and say hello if you are close by.

Thursday and Friday I will be doing marketing sessions at the Women in Agriculture conference in Kearney. Being one of a handful of men at a meeting of 500 women is very stimulating. Sharon will be teaming with me on two of the sessions this year for the first time. There is still time to make reservations by calling 800-535-3456.

The following Monday, September 18, I will be speaking at Ord, Nebraska. I was scheduled to be at the Kearney and Ord meetings last year, but I became too ill to travel. It is great to be back in the saddle! I will be looking forward to harvest preparations by the time the meetings are over.