For the past four days, the grain markets, primarily corn and soybeans, have continued their action of being solidly higher one day, and solidly down the next. We have seen both limit up and limit down days over this period of time. In reading the analysis of other grain traders who use fundamental analysis, it amazes me that their analysis swings almost daily from very bullish to very bearish from one day to the next. This seems to suggest a consolidation pattern and indecision, in a market which has no preference that moves the market solidly in one direction or another. We see, in both corn and soybean markets, a solid price floor being built, below which prices do not dare venture. Apparently, commercial hedgers see that these prices provide them with such a bargain that they are buying with fervor when prices reach those levels.This is really quite typical behavior for grains toward the end of the summer. We are seeing almost daily updates regarding the condition of the corn and soybean crops. For example, the progression of the corn through the silk, to the blister, to the milk, followed by the dough stage, and then the dent stage, and finally to the maturity stage, are carefully monitored and compared with previous years. The one over-riding message thus far this season is that the maturity levels of the two crops, corn and soybeans, are well behind their normal maturity at this late stage in the season. This makes them highly vulnerable at the end of the season to early frosts or an early winter. If an early frost damages the crop, yields could very suddenly by sharply cut within just a few days. All of this risk tends to put a solid floor under prices. Eventually, it could send the market into a new bull trend if yields are cut during the late September, early October time frame. Until the grains are harvested and inside the grain silos, the risk is largely to the downside for yields, and thus, to the upside for prices.
