The USDA said that 8% of the corn crop was harvested as of Sept. 9, up from 5% last year and the five-year average of 5%. Soon there will be corn piled up everywhere. The USDA had the corn crop last month at 13.054 billion bushels. This is a very large crop indeed, and the market has already discounted anything up to 13.1 billion bushels-so anything less than that shall be supportive.

It is wheat that is driving the grain markets. The hoped for rains upon the Australian and Argentine crops did not take place over the weekend. One official in Rabobank's office in Sydney notes that without rain in the next several days, some regions in the wheat producing areas of Australia will soon begin to sacrifice crops to grazing. And as the global crop wanes, global demand rises. We are in the last push of a major bull market in wheat and in bull markets of this magnitude, it is not unusual to see 50% of the price increase in the final 10% of the time frame. What is going to be the next market to trade like wheat? Is it cotton? Or rice? Can it be soybeans or corn? We are long November Rough Rice for clients at $1,125 and looking to sell it at $1,175. Rice is a very low volume market, so you do have to be careful.

Everything trades in a cycle and the cycle is now for our markets. China is still interested in buying our agriculture products and that can be as bullish as any. China has rampant food price inflation. Corn costs more than $5 a bushel in China, and soybeans are more than $14 a bushel. China wants to import our pork, so we are long October Lean Hogs and short October Live Cattle. This is a seasonal spread we do every year, which takes up a margin of $800. We will be in this livestock spread for the next 20-30 days. This spread has worked 12 out of the last 15 years. Take a look at buying SN8 and selling SX8 on pullbacks. This spread ties up margin of $300. Do not underestimate the appeal of these low margin trades.