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Waiting for full harvest

Agriculture.com Staff 09/25/2009 @ 1:30pm

The markets have been caught between a rock and a hard place this week. Rain in much of the Corn Belt, especially in the south, has slowed harvest. This has led to a few days of short-covering trade. There have been many days where market participants are making money by buying the breaks and selling the subsequent rallies.

Today was one of those days, with a soft open due to a very strong dollar, weak crude oil prices and weak financial markets. Yet, prices gradually moved higher during the day in a "buy the breaks" mentality.

Where it is not raining, yield reports have generally been good. The rain, particularly in the south, has slowed up harvest so much that many in the cash market are scrambling for supplies to tide them over until drier weather prevails.

The soybean yield reports continue to impress. There are a few "below expectations" reports, however. The Corn Belt has definitely not hit full throttle harvest yet. With many believing farmers will sell beans and store corn, the market will continue to monitor yields and will pay increasing attention to cash movement during the fat part of harvest.

For corn, there are good yield reports and poor yield reports, but overall there are too few reports to generalize. Certainly, there has not been enough time passing to make a comment about whether or not yields will improve or decline as harvest progresses.

Some may not even be willing to discuss yields until there has been a frost. It's not that there is an early frost in the forecast, but until the growing season is finished, many will be unwilling to estimate corn yields.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

The markets have been caught between a rock and a hard place this week. Rain in much of the Corn Belt, especially in the south, has slowed harvest. This has led to a few days of short-covering trade. There have been many days where market participants are making money by buying the breaks and selling the subsequent rallies.

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