The pace of the US harvest remains rapid with corn reportedly 54% gathered, way above the 20% average; some states are expected to have finished by the weekend, far earlier than in previous years. The soybean crop has reached 41% harvested which compares with just 19% as an average and expectations are for about 60 – 65% by the weekend.

The consequence of such a pace has been for the soybean market to continue to decline as markets anticipate improved soybean yield in the forthcoming private estimates due this week. Wheat prices have also fallen again today whilst corn found a slight foothold on concern that the October output figures and tight end stocks could well cause a rebound.

The underlying fact that soybean stocks are going to be extremely tight, even if we see some improvement in yields, leads us to believe that the current decline represents a buying opportunity and the unwary could well get badly caught out.

Given the liquidation by funds it is interesting to note that the open interest has changed very little; it shows a swing from speculators to commercials, and if there is an appetite for the funds to return we could well see a return to higher levels in speedy fashion. There has been little, if any, demand rationing and the global balance sheet remains tight.