Pro Farmer Tour Driving the Grain Markets

The annual Pro Farmer crop tour is making its way across the Corn Belt this week
with the grain markets eagerly awaiting the results. The outside markets are mixed so
far this week. The Dow fell 217.74 points to settle at 13,057.46 Thursday. Oil continues
its steady climb upwards adding another $1.65 a barrel to trade near $97.83 as of this
writing. Gold is up $54.60 an ounce while the dollar index has fallen sharply. The grains
have had a mostly positive week again.

Corn got a boost early in the week as the Pro Farmer crop tour reported
surprisingly low yield estimates for Ohio and South Dakota on Monday. The market
rallied as a result early in the week only to fall off the last couple. The September
contract has added 9 cents for the week to settle at $8.08 today. Keeping a lid on the
market was Pro Farmer’s yield estimates out of Illinois and Indiana, which were higher
than the USDA current numbers. Export sales met expectations for the week and were
reported as 108,400 MT for ‘11/’12 and 217,000 MT for ‘12/’13.

Soybeans were the leader to the upside adding 54 ¼ cents to $17.25 ¾ on the
September contract. The market is still trying to find a level where it feels comfortable
that demand has been rationed enough to meet the short supply. Also, a typhoon off
the coast of China is set to make landfall this weekend in an area that produces a vast
majority of their crops. Pod counts have been mostly disappointing during the Pro
Farmer crop tour. Export sales were robust again and were reported as 132,900 MT
for ‘11/’12 and 585,800 MT for ‘12/’13.

Wheat has been in the passenger seat for the last few weeks and has only
managed a modest ¼ cent gain. The September CBOT contract ended the day at
$8.74. European and Russian harvests are progressing quickly with yields continuing
to disappoint. A couple of private Russian agencies have downgraded the production
figures this week. Exports were within expectations and were reported as 468,800 MT
for ‘12/’13.

The grain markets will be anticipating the final results from the Pro Farmer crop
tour which will be released at 2 PM CT Friday. The reaction will come Sunday evening
once the markets re-open for trade. In relation to the current USDA estimates, the Pro
Farmer numbers have varied on either side depending upon the state. Some revisions to
both production and demand are imminent in the next round of Supply/Demand reports.