The stage is set but who will begin the show?

It is always a bit of a challenge to find something to write, pertaining to markets at least, the morning of a USDA report as within a couple hours anything one says could be rendered meaningless.  I believe that especially holds true this morning as we really need fresh news at this time.  Of course, the August report is by no means that “final word” on the crop but is the first real crop estimate of the year and should set the bar for subsequent reports between now and the fall, especially concerning the corn market.  I was on a panel being taped for this weekend’s U.S. Farm Report yesterday and the consensus of the group was that with an average estimate of around 166 bpa for corn, a figure of 168 or higher would set a negative tone but of course less than 166 a positive one, particularly considering the weekly ratings have deteriorated since the beginning of the month.  Beans are still more of an open target as most of the trade believes August is the make or break month and there would appear to be few new weather issues popping up, as long as you want to ignore the fact that a large swath of the Midwest and the Plains States sit in various degrees of drought.  Regardless, we wait for the word of gov later today and will adapt our outlook accordingly.  Here again are the average estimates for the domestic production, these curtesy of the Wall Street Journal survey; 2017/18 corn production at 13.841 billion bushels using a yield of 166 bpa.  This would leave us with a projected carryout next year of 1.966 billion bushels. Total bean production is estimated to be 4.202 billion from a yield of 47.4 bpa with ending stocks of 401 million.  Wheat ending stocks are projected to dip below the psychological 1 billion mark and come in at 907 million.  One final note on the report.  It seems that we almost always now experience five to ten minutes of market nonsense when numbers are released as the high frequency and other computer-based traders wrangle with each other trying to grab the upper hand but ultimately, little of that matters. It is where we finish the day that will reflect the underlying sentiment of the market.

I recognize that there are still more than a few of you out there that believe chart analysis is probably one step removed from Voodoo or fortune telling.  When I first entered this business, it seemed there was almost an invisible wall that had been constructed separating the fundamentalists from the chartists and…

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