All eyes on September WASDE report Friday

After a rally in soybeans on Thursday, a sharp drop was seen Friday morning. What caused either is to be debated, but it probably has a lot to do with positioning ahead of the September World Agriculture Supply and Demand Estimates at 11 a.m. on Friday. ADVERTISEMENT Just prior to that report, Randy Martinson, president of Martinson Ag Risk Management, analyzed movements in the markets with Jamie Dickerman of the Red River Farm Network during the Agweek Market Wrap. What Martinson expects to see in that report is some amount of reduction in corn yield, simply because conditions have worsened since the August report. “So with that, I would expect a small decrease in yield,” Martinson said. “I don't think we're going to see anything where the Pro Farmer dropped at seven and a half bushels, but I think we could drop corn yields about a bushel, maybe two bushels.” He expects the report to be neutral to maybe a little negative. He expects USDA will not make a major cut at this point. As for soybeans, he does not expect much of a change. “But that sets us up then for better reports down the road,” Martinson said. What will make some movement is a reduction in corn yield. If it comes in at 178.5 bushels an acre or lower, it’s friendly to the market. For soybeans, 52.5 bushels an acre seems to be the number that could set the tone. Anything more or less will cause a reaction, and it could be swift. ADVERTISEMENT Part of the rally seen on Thursday came from news of China coming in once again to buy 1 million metric tons of soybeans. Demand was also seen in corn as Mexico also made some purchases this week. The demand in grains has finally pushed weather out of the frame. “Now, the only thing that will really matter is if we start getting rain as we get into the harvest of soybeans and corn, and that might delay harvest and cause some quality concerns,” Martinson said. “But at this point, you know the weather is becoming a backseat.” Dickerman mentioned how wheat has not held onto the headlines quite like soybeans. Martinson agreed that wheat has been trading based on headlines. He does not expect any news from the WASDE report to move wheat. It’s more likely that movement would come from the small grains summary expected at the end of the month. In that case, eyes will be on expected decreases in exports from Russia and Ukraine. He also expects to see production increases in Australia and Argentina. Dickerman bought up the impact that record-high crude oil prices are having on markets. Martinson said crude oil is often a leader. As tensions flared up this week, crude oil rose once again. That brings concerns for all the commodities that are reliant on harvest and shipping mostly using diesel fuel. “Well, it's hitting at the wrong time,” Martinson said. “As Brazil's planting, the U.S. is harvesting. The diesel consumption is rising sharply, and we're looking at record high prices.” The cattle market saw some returning strength this week. Martinson expected to see more retracement, but cash is helping to lead again. ADVERTISEMENT “So overall, the cattle actually had a really good week after seeing some dismal weeks ahead of them behind us,” Martinson said. After the September WASDE is released, Martinson said eyes will be on harvest season, which is fast approaching. “Everybody's combining, whether it be up, you know, corn and soybeans are being combined up here in North Dakota, all the way down into or over to Illinois,” Martinson said. “So we are going to be seeing harvest results that are going to kind of take the lead and kind of drive this market next week.” (The Agweek Market Wrap is sponsored by Gateway Building Systems.)