9-10-10

Crude oil traded quietly in the low to mid $70 range during most of the week, not reacting much to a weekly inventory draw of 1.9 million barrels on Thursday. A minor breakout came on Friday though with word that a crude pipeline from Canada was being shut down. Nearby crude was 2.6% higher for the week, trading at the highest level in nearly a month. It was a quiet, holiday-shortened week on the economic front. The S&P moved quietly higher, up less than ½%. There are some rumors that China may be releasing some economic data early over the weekend. There is some speculation that strong economic data there could lead to a rate hike. Copper traded lower this week after hitting a 4-month high last Friday.

The corn market has been steadily rallying since late June, and the USDA didn’t disappoint the bulls with its 2.5 bpa yield reduction on the monthly crop production report on Friday. Importantly for short-term direction, the market reacted with new highs to the supportive data. Stocks levels point toward some rationing of use as we go through the marketing year, but buyers have not shied away yet. For the week, December corn was up 13.75 cents.

November soybeans hit a new 2010 high mid-week, before falling on a higher yield estimate on Friday. For the week, the contract was down 4 cents. The 44.7 bpa yield estimate, up from 44 bpa last month was a little higher than the average guess. There is more uncertainty about the bean yield due to few yield reports from the heart of the growing belt, but that will likely be remedied over the course of the next week.

Wheat had a typically volatile week, but the Minneapolis December contract was down just 1.25 cents for the week. Kansas City was up 1.5 cents, and Chicago was down 4.5 cents. Export sales were strong again as the buyers bid for U.S. milling wheat. Egypt is buying soft wheat from France, and hard wheat from the U.S.