When the United States credit rating got downgraded by Standard and Poors it caused a great amount of volatility in the global markets, sending the S&P 500 and Dow Jones Index on a roller coaster ride. The increased volatility was also felt in the grain complex with a combination of investors wanting to minimize their overall risk exposure and margin calls triggering traders to close out positions.

The USDA was scheduled to announce their supply and demand numbers Thursday morning which also added to the volatility. Corn production forecast for 2010 is 12.9 billion bushels, up 4 percent. If those numbers are realized, it will be the third largest production total on record for the United States. Based on August 1st conditions, yields are expected to average 153 bushels per acre, and the fourth highest yield on record. The bullish report sent Corn prices limit up at the open Thursday morning. Corn futures settled the week up at 7.1425, the highest close for the December contract.

Soybean production forecast for 2010 is 3.06 billion bushels, down 8 percent. Based off August 1st conditions, yields are expected to average 41.1 bushels per acre, down 2.1 percent from last year. Soybeans were trading below their major price support 13.00 into the USDA report, once those numbers came out, prices rallied into Friday settling slightly down from the prior week at 13.3475.

Wheat futures production forecast for 2010 is 2.08 billion bushels, down 6 percent. Based off August 1st conditions, yields are forecasted at 45.2 bushels per acre. Wheat futures have been trading sideways for a month and half but holding above 7.00 per bushel. They settled the week at the highest level since mid June at 7.3225. December (Z) contract is the front month for Wheat futures.

To learn more from Pratik and the guys at The Futures Room, visit their site at TheFuturesRoom.com