Professional consulting firm, Informa, releases slightly bullish production number for the U.S. as the market experienced an inside trading day.

OUTSIDE MARKETS: Advantageous precipitation seen on weather maps in the Corn Belt and large soybean producing areas resulted in both corn and beans approaching contract lows. New lows were unable to be obtained as we are still in the first week of August and have a long way to go before we see yield confirmations. Weakness in the grain complex and the stock market into today confirms that we did indeed experience a short covering rally yesterday and may still be searching for a bottom.

General Comments: Trading sideways overnight and transitioning into a negative market for a majority of the morning, cotton didnΆt obtain a steady footing until near-noon but remained negative. Unable to go against the grain, we experienced an inside trading day with no real sense of which direction weΆre heading; headlines were mixed as we await confirmation from the USDA on August 12th on whether they have changed production estimates and will get a first glimpse at the Ginnings Report.

Slightly bullish, Informa released their pre-report estimates for crop yields and production for both the U.S. and World numbers. Production in the U.S., according to Informa, has the potential to drop to 16.1 million bales; this contradicts recent rumors of a larger crop and is roughly 400,000 bales smaller than the current USDA estimate. InformaΆs World numbers contracted by a total of 2.2 million bales to 113.4 million due largely to a million-bale drop in Australian production; USDAΆs current estimate for World is 116.42 million bales.

After three consecutive months of lower settlement prices, August has been able to hold above JulyΆs 62.09 and just might hint that the December contract has found a bottom. With these low prices staving off producer selling, the market should begin to recover unless we do see larger production on August 12th.