Grain markets were higher across the board, led by a volatile but strong wheat market. Weather woes continue to plague the wheat complex with the ongoing drought in Russia and persistent rains across northern Germany where producers are trying to complete the last 10 percent of the harvest. It appears that quality has deteriorated to feed status for much of Germany’s wheat, forcing them to import U.S. spring wheat market for quality supplies.

The corn market also was stronger on disappointing yields as the harvest moves into the southern Midwest. Traders expect that USDA will lower production prospects as a result, which would take ending stocks down to uncomfortable levels given the expected large demand base.

Soybeans were just slightly higher as weather conditions have been good for most of the soybean crop and yields look to be larger than earlier expected. But strong wheat and corn, along with active fund buying managed to keep the soy complex in positive territory. The cattle complex was lower as cash markets began to slip after a very strong rally through the summer. Beef prices have also faltered after an extended run, and movement dropped off sharply after the buying for Labor Day was completed. Feeder cattle felt the pressure from a higher corn market and lower cash markets in the southern plains. It appears the feeder cattle run is starting early this summer and numbers moving through auction yards have been much higher than expected, which has pressured the cash markets.

Precious metals were higher as the U.S. dollar dropped, making metals cheaper on world markets. Talk from the FED that they would continue to intervene if the economy slipped again led to assumptions that they would do all they could to keep some level of inflation, which prompted investors to move to metals as a hedge. Energies were mostly higher despite crude oil stocks being much higher than expected as refining levels dropped lower. Strong economic data from China had energy traders projecting continued strong demand from them, offsetting the sluggish economy here in the United States.

The U.S. dollar was lower as the Dow moved strongly higher on better than expected retail sales data and optimism for the economy to gain better traction. Foreign currencies were higher on improving overseas economic data, which also lent some pressure to the dollar.