Corn up nearly 90 cents, beans over $13, wheat at three-year highs ahead of Thursday's WASDE

USDA releases its September Crop Production and WASDE reports Thursday, September 11, at 11 a.m. Central, and for once the market is running ahead of the government instead of waiting on it.

What moved

Since the mid-August WASDE:

• Corn futures are up close to 90 cents. Iowa cash bids averaged $4.84 in early September, against a spring crop insurance projected price of $4.62.
• Soybeans: November futures are trading above $13, compared with about $10.30 a year ago. Iowa cash averaged $12.75.
• Wheat: December Kansas City hard red winter is over $8, a three-year high, on renewed Black Sea shipping disruptions that have pinched exports from the region.

The drivers, in the trade's own words: falling crop ratings, dropping expectations for U.S. yields, and world supply problems all landing at once. The most recent Crop Progress report had corn condition at its lowest start to September in three years, after the heat dome that sat over the central Plains and western Corn Belt through August.

What the trade expects Thursday

• Corn yield around 178.1 bushels per acre, down from 180.7 in August, for production near 15.77 billion bushels.
• Soybean yield near 52.5, production just above 4.5 billion bushels, which would still be a record.

If USDA comes in near those numbers, the rally is already priced. The risk is in the surprise either way: a yield well under 178 keeps the run going into harvest, while a number close to August's would pull the rug on a market that has gotten long fast.

The livestock angle

Cheaper corn has been one of the quiet supports under feeder cattle prices for two years. A $5 corn market changes the math on cost of gain in the feedyard, which in turn caps what a feeder can pay for calves. Every quarter of feeder cattle strength this year came with sub-$4.50 corn underneath it.

For anyone buying supplemental feed for cows this winter, the same rally is showing up in distillers grains and corn gluten bids. If you have not locked in winter feed, the WASDE is the report that will tell you whether waiting is still an option.