Markets Rise On Eve Of Crop Report

CattleNetwork:

A Reuters poll of 21 analysts this week pegged the U.S. corn yield at 127 bushels per acre, the lowest since 1997, with production at a six-year low.

The U.S. Department of Agriculture (USDA) August crop report, to be released at 7:30 a.m. CDT (1230 GMT) on Friday, has taken on extra importance since the department's estimates will be based on surveys of farmers and its own experts inspecting fields for the first time since the drought began to rally prices in mid-June.

New-crop December corn futures rose to $8.29-3/4 per bushel, the highest price ever for a Chicago Board of Trade corn futures contract and above the previous record of $8.28-3/4 that was set by the spot September contract three weeks ago.

There were several bullish inputs to the markets.

Traders were moving or rolling long holdings in front-month September corn into the December and other new-crop contracts, preparing for a bullish government crop report and in step with the periodic rolling of positions undertaken by a Goldman Sachs index fund.

"The Goldman roll started Tuesday, you have that going on and the report is tomorrow. Everyone is expecting the corn number to be pretty friendly," a CBOT trader said.

Also, "there's talk China bought 3 to 4 cargoes of beans and looking for more, so there's a lot going on," he said.

Soybeans soared 3 percent as the drought kept trimming U.S. crop prospects, as China surfaced this week buying U.S. soybeans and as traders banked on further demand from the world's largest buyer of the oilseed.

"Beans continue to be driven higher by more new-crop sales to China," Cekander said.

The U.S. government on Thursday said China bought 165,000 tonnes of U.S. soybeans, boosting China's total purchases for the week to 271,000 tonnes. Each cargo of soybeans holds 55,000 tonnes.

Wheat rose in step with the gains in corn and soybeans, and on worries about weather stress in Russia's lush Black Sea wheat growing region.

Things will very likely be crazy for the next couple of trading sessions, but you never quite know what might happen.  I can't imagine how expensive livestock feed is going to be next year.