Nearby crude oil traded at the lowest level since early June this week, but the inability to close lower following bearish inventory data on Wednesday resulted in a rally to close out the week. Crude oil has been tracking closely with equity markets as economic confidence and waxes and wanes. A Friday rally on the S&P 500 seemed to say that the worst of the news was priced in, after news on the economic front started the week in the horrible category on Tuesday.

The Existing Home Sales report showed a 27.2 percent annualized decline, the worst in the history of the data series. Weekly jobless claims and the second quarter GDP revision later in the week, while not showing any positive momentum, did manage to best market expectations. Crude oil was up 2.5 percent on the week, while the S&P 500 index was down nearly one percent. Both charts showed outside higher reversals on Friday, setting up some positive technical momentum for next week.

Grains reverted back to more closely mirroring the financial markets this week. A surprise one percentage point improvement in the corn condition rating on Monday combined with the bloodbath in financial markets to send the corn market sharply lower on Tuesday. The washout seemed to be linked to significant fund liquidation after the most recent Commitments of Traders data had showed funds with a net long position of over 300,000 contracts.

Strong export demand and the perception that yields will fall below the USDA forecast of 165 bushels per acre brought the corn market back to close down just ¼ cent on the week. December corn closed the week on a strong technical note, eclipsing the August high and trading at the highest level since January.

November soybeans were up 22 cents for the week as some dryness sneaks into areas of the growing belt. Dryness is showing up in parts of the eastern growing belt, along with remaining well entrenched in the Delta. Wheat had a relatively quiet week, closing up 7 cents in Minneapolis, down 5.25 cents in Kansas City, and down 16.5 cents in Chicago. The USDA attaché in Russia lowered his production forecast to 41 mmt, 4 mmt below the official August USDA estimate.