Good morning friends!

Corn 340’6 (-1’2)

Soybeans 959’2 (+2’6)

Chi Wheat 396’2 (-8’6)

KC Wheat 405’6 (-9’2)

Cotton 67.55 (-.40)

Wheat, corn and cotton were all weaker this morning as market breakdowns were the theme here in Chicago in the row crop markets, Corn and soybean export sales through last Thursday were tremendous, but I think the trade is disregarding demand right now as yield reports continue to be impressive in soybeans, and very good in corn as the harvest gets going north of I-80. Something is afoot in the metals markets right now as silver is down about 10% for the week! Not all was bad on in commodities, crude oil continues its push above 50.00 in front month contracts, which has me scratching my head in the grains. Corn, wheat and cotton all closed off lows and soybeans actually which is about the only good thing to say about the markets besides Oats being green on the day. Maybe Oats knows something…

We got our first outlook at CONAB numbers (Brazil) this morning. . Soybean planted area is forecast at 83.5 Mil acres, up 1.5 from a year ago. This is  in line with trade guesses.  Soy production is estimated at 103 MMTs, up 2 MMTs from the USDA’s forecast. These numbers shouldn’t change much over the coming weeks, this is the time of the year when the market trades new crop as certain, with nothing in the ground yet.  I remain bearish on yields right now with sub par moisture in Brazil.

CONAB also estimates total Brazilian corn production at 83 MMTs. Last year Brasil produced about 66 MMT, after mid year estimates around 85 MMT didn’t come through. I remain bullish of corn at these prices as the balance sheet in Brazil is super tight, they have little room for error this year.

Cotton is hanging right above its trend-line at 67 cents. Its also below the 100 day EMA which as a bear, has me excited.  You know what doesn’t have me excited?  This hurricane….the outcome of this is unpredictable.  Part of me would say “buy some calls” but for the folks out in Texas, you wont lose production from it so there isn’t the risk that it is for the folks in the SE. Regardless, cotton is at a make or break point.