If you needed an opportunity to get caught up on pricing, hopefully you caught the run to 90-plus earlier last week before the bottom fell out. 

Prices (Dec13 futures) hit over 93 cents for a while on Monday of last week, but by Tuesday afternoon  had declined to under 90; dropped sharply on Wednesday, and we closed Friday last week at 84.

As has been the case also on 2 previous occasions, these run-ups haven’t had a long life. Something gets the bullish mood excited and that adds a little fuel to the fire but then “reality” sets in and throws a little water on the fire.

For what it’s worth, I think that’s, in part, what happened last week. Prices ran up due to both a positive  August supply/demand report but also because speculative interests (buying) saw opportunity for  potential profit. Once the optimism began to wear off, the specs took profits and headed for the door and  there was no new good ol’ basic economic news to keep the fall from materializing.

We can take two very important things from this:

1) Prices have settled back pretty much where they were before the run-up.

2)  Let’s not forget there was some supply/demand fundamentals (concerns) also behind the run-up. This little fact hasn’t gone anywhere.

Let’s continue with that thought shall we. The USDA August estimate for the U.S. crop was 13.05 million bales — the first estimate based on actual farmer survey for 2013 and 500,000 bales below the July estimate. There seems to be a growing feeling that this crop might get smaller. Maybe it’s because south Georgia is about ready to float off the map and my view is biased. But seriously, growers here are concerned. The Texas crop also could get smaller.

The southeast, Georgia and the Carolinas, especially, are already soaked. Georgia yield is likely impacted by disease and weed pressure, standing water and lack of timely field operations. If the wet pattern we’ve  been in since June continues into harvest time, we’ll really be in trouble.

Growers are already concerned about not being able to deliver on bale contracts. Corn harvest has been hurt. This latest run might be over, but (no promises) we may get another one — maybe not to 90-plus cents again, but something between that and where we are now.