Corn: December corn settled up ½ cent at $3.89 ¼ which is the highest settlement in 3 weeks. For the week, CZ gained just ¼ cent. One should note, however on the longer term weekly charts, this was the highest settlement in 2 months. Looking at the big picture, CZ has resistance at $3, 94 ½ which, coincidentally was Wednesday’s high. The next major high is just ½ cent above at 3.95 posted on September 15th which is a 2-month high. Conclusion? Someone somewhere is looking at that level, which happens to be the 38% retracement of the overall swoon from the July high tick at $4.54 ½ down to the contract low $3.57 ½ posted on August 12th. That 96 ¾ cent haircut is what we’ve been digesting for the past 2 months. Today no bullish relief came from either last night’s FC Stone yield estimates or today’s Informa estimates. The funds are still long close to 80K contracts. They have yet to throw in the towel on their long bet that prices will move higher. That might all change after next Friday when we get another WASDE report from the USDA. Hopefully the USDA will feed the bull and we can explode higher through the $4.00 level. Hedgers: Make sure you have downside protection in place for any unpriced bushels going into this report. Take advantage of the fact that we are near 2-month highs. Consider a $3.80 put for 5 cents for the next 20 days for any unpriced bushels you want to protect. Wheat: December wheat settled down 5 cents at $5.13 ¼. For the week, however, WZ gained 5 ½ cents. WZ also posted its highest settlement in 2-months on the longer-term weekly charts. From a bigger picture perspective, WZ suffered through a $1.60 price haircut between the June 30th 9-month high at $6.23 ¾ down to the contract low at $4.63 posted just a month ago on 9/4/15. Thursday’s 2-month high at $5.23 ¾ and today’s high at $5.23 came dangerously close to the 38% retracement of that $1.60 sell-off which comes into play at $5.24 ¾. The funds came in short just 22K contracts today. The 60 cent rally was obviously fueled by short-covering as the funds reduced their short bet by 50% over the past month. Next Friday’s USDA may or may not provide the fuel to boost WZ through resistance. Today was the day all week that I didn’t see a story on the wire talking about “dryness” in Russia and Australia or the rally in French milling wheat. Stats Canada came in largely as expected, so there were no surprises there. Hedgers: Take advantage of the 60 cent rally we have enjoyed over the past month. How? Catch up on sales. Or if you are going to store wheat protect any unpriced bushels with a relatively inexpensive November $4.95 put for 7 cents a bushel. If wheat decides to swan-dive and re-test the contract low at $4.63 those $4.95 puts could really pay off. If wheat rallies hard after the report; will you really be upset about “losing” the 5 cent put premium? Soybeans: November soybeans settled down 3 cents at $8.74 ¼. For the week, SX lost 15 cents. Today was a disappointing finish after Wednesday’s 6 week high and peak above the psychologically important $9.00 level. Yield reports continue to be generally higher than expected. From a cursory look at yield reports coming in via our clients, the general consensus is “average to above average yields.” Certainly last night’s FC stone yield estimates and today’s Informa numbers support the fact that yields are closer to agreeing with USDA estimates as opposed to being wildly off-base. For now the funds hold fast to their short position of roughly 40K contracts which they have maintained over the past several weeks. They have stayed short despite a 50 cent rally between the contract low at $8.53 ¼ and Wednesday’s high tick at $9.02 ¼. The USDA on the September 11th gave us the contract low; Wednesday’s USDA gave us a 6-week high. Hedgers: SX is sitting right in the middle of its recent 50 cent rally. To button up any unpriced bushels before the report consider a November $8.50 put for 8 cents. It serves as a safety valve should the recent contract low at $8.53 fail to hold after Friday’s WASDE. Today’s Employment report made the outside markets rock and roll with a dose of volatility and violent price discovery. The Dow had a 500 point trading range today; first dropping on the unemployment figure; and then once everyone was short or out of their longs; turned around and rallied 480 points from the low to end the day almost 200 points higher. The bond market had a 3 handle day; The 10 year dropped back below 2% yield today as bond traders tried to gauge the odds of a Fed rate hike. Gold had a $37 trading range or a 3% move. The US dollar whipped around in response to the bonds and stock indexes gyrating. Looking at today’s market moves, its very possible that a lot of long hedges and short hedges were stopped out if they were using futures to hedge their market risk. I’ll ask you this. What good is a hedge if you get stopped out of your protection right when you need it most? The nice thing about the long option strategy we use? You can’t get stopped out of your hedge when you need it most. Our program is built on the fact that we don’t pretend to know how the market will settle in the wake of these numbers. It’s based; instead of managing the risk and leaving the upside open on our unpriced bushels. Ask yourself what would hurt you most and then get a hedge that addresses that fact. Would a 50 cent rally from current levels hurt your marketing year? Or would the grains falling out of bed and re-testing the contract lows hurt you more? Whatever your risk, make sure you get buttoned up in front of the USDA report next Friday. Puts protect against lower prices. Calls protect you if you are over sold or had a short crop and would suffer if prices explode higher over the next several months. Have a great and safe weekend. CER I can be reached at crobinson@topthird.com or direct 866.924.0486 Risk Disclosure: THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION. THIS MATERIAL HAS BEEN PREPARED BY A TOP THIRD BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, TOP THIRD DOES NOT MAINTAIN A RESEARCH DEPARMENT AS DEFINED IN CFTC RULE 1.71. TOP THIRD, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN. 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