Markets opened this morning with a positive tone following the extended weekend in the US to celebrate Labor Day. However, the early morning euphoria eased towards the end of the session in Chicago with soybeans, corn and wheat all just about ending in positive territory. The early highs, in which front month soybeans set another new record high, were all left behind as the session drew to a close.

Early month trade often attracts new money and fresh impetus to former trend direction, which we referred to in recent updates, however the market took fright at the mighty requirements of the US economy. Shares turned negative as US data showed the third consecutive month of decline in the manufacturing sector – and at the fastest pace in three years.

On a positive note for commodity markets, nothing in the fundamentals has changed and we approach the USDA September report with caution expecting data to show further yield reduction in both corn and soybeans as a result of ongoing dry conditions.

In terms of statistical data released today, the German ministry have released their production estimates and these show a reduced soft wheat output of some 105 kmt to 22.386 mmt, below last years figure of 22.71 mmt.

We still view any dips in price as buying opportunities for those with gaps in cover.