Traders have been patiently waiting for the USDA Crop Production report ,which was due Wednesday January 12th, to get action back into these low volume range bound grain markets. There was very light activity in the grain complex the first couple of days as traders were either waiting on the sidelines, closing out positions, or establishing positions prior to the USDA numbers.

The USDA reports are always released an hour prior to the opening bell. Once the numbers were released, they fell in line with what analysts and traders were expecting. Grain prices are seen as extremely bullish which is a continuing trend from 2010 numbers. 2010 Corn production for the U.S. was 12.4 billion bushels, 1% lower than thought in USDA’s November estimate and 5% below the record crop in 2009. Yields averaged 152.8 bushels/acre. For Soybeans, U.S. farmers raised 3.33 billion bushels in 2010, down 1% from the November 2010 estimate and 1% lower than the 2009, making it the second-largest bean crop on record. These numbers sent a buying frenzy throughout the grain complex.

The most active grains were Corn and Soybeans. Corn futures gapped up on Wednesday morning, lifting prices to offer at their exchange imposed daily limit price along with Soybeans. Although prices came off their limit offer, both grains stayed higher throughout the morning and into the afternoon. Wheat futures were the most volatile grain in the complex. Wheat opened 60 cents higher only to get a wave of sellers pushing pressure prices down to make new lows multiple times throughout the day. All three grains settled the day up after the bullish report was released. For the rest of the week, Corn continued to rally higher, breaking monthly highs and settling the week at their highest levels in 30 months.

The last time Corn prices were this high was back in July 2008, when the financial markets were turning. Soybeans also advanced into Friday and settled above their major resistance price of 14.00 cents a bushel at 14.2275. Wheat futures remained choppy the next couple days, and hit liquidations on Friday, causing them to settle the week slightly down from prior week’s closing price.

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