I was all set to write a retrospective regarding the 9/11 events of 10 years ago and what changes we've seen in the markets. But then I got to thinking, there will be a number of those pieces in print, on radio and television, and in every other media source this weekend. And for my money, none of them will be better than Urban Lehner's "Letter From the Editor" column on DTN. Please take a moment, jump over and give it a read. It's well worth your time. Go ahead, I don't mind.

For those of you who came back, and I don't blame those who didn't after reading Urban's column, I want to change the tone a bit by taking a look at where we are in the markets heading into this weekend and beyond. Maybe today is the calm before the storm, with USDA set to release its September crop production and supply and demand reports first thing Monday morning (for more information, see the report preview on DTN, "Demand Focus of Latest Supply, Demand Estimates").

As I drove into work Friday morning, I had just changed over from a melancholy discussion of the events of 9/11 to the local "oldies" radio station when the Earth, Wind & Fire song "September" came on. The contrast between the two could not have been starker. It's a great song. One of the best feel-good songs when so much seems somber.

If it were any other weekend, I could picture in my mind's eye U.S. grain and cotton producers dancing to this upbeat song in full anticipation of the bullish numbers to come next week, and rightfully so. U.S. corn ending stocks to use is expected to drop below the record low of 5% set at the end of the 1995-96 marketing year, while new-crop soybean ending stocks could creep closer to the magical floor number of 100 million bushels. In my market outlooks I've been giving over the past few weeks, it has been hard to be anything but bullish corn and soybeans, though the question of demand destruction continues to lurk in the corners of the corn market.

A while back, I wrote a column titled "Adequate," talking about how U.S. corn producers should not feel compelled to greatly increase corn acreage and production just because short-term (yes, three years is short term in the grand scheme of things) has tightened global supplies. The title came from a comment expressed by an OPEC spokesman when asked if oil production would be increased to meet a perceived global supply shortage. To paraphrase his answer, "Supplies are adequate." U.S. corn producers could take that same stance and lose no more sleep than the average oil sheik as prices continue to climb.

DTN's Grains Analyst John Sanow talked about the extraordinary number of corn acres it would take in 2012 to begin rebuilding corn stocks. The bottom line is there likely won't be enough seed to see this occur. Therefore, unless demand is completely shut down, it is difficult to not be bullish.

On the other hand, DTN contributing analyst Elaine Kub pointed out there are some possible bearish scenarios that can be pieced together heading into next year. Most of them may take a while to play out, but if things fall in line, we could be talking about a much different market landscape next September.

My thoughts, from a technical point of view, remain somewhat cautious. The last long-term technical signal posted was a bearish key reversal back in June, meaning the long-term trend of the market remains down. What about the recent rally? Another look at the chart shows it may be nothing more than a normal retracement after the initial selloff. My fundamental view is also not as bullish as it was at the end of August, with the carry in corn's futures spreads strengthening while national average cash basis versus the December contract has been weakening, both indicating a less bullish commercial outlook.

None of this should matter Monday, though. Market bulls should dance to the September numbers, though this could be the last round of ultra-bullish numbers released for a while.

Darin Newsom can be reached at darin.newsom@telventdtn.com

(AG/SK)

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