Are you ready for the Nov. 8 Crop Production and World Agricultural Supply and Demand Estimates reports? Will they rock or rattle the markets?
Due to the government shutdown, USDA did not release its October Crop Production and WASDE reports. Its last reports, released in September, peg the national corn yield average at 155.3 bu./acre. For soybeans, USDA’s yield estimate is 41.2 bu./acre.
USDA will have an opportunity to revise these estimates, as well as others, when it releases its Nov. 8 reports at 11 a.m. CDT.
What information in these reports could shock the markets? Four market experts share their thoughts on the possible surprises.
1. Bullish Tone
Farmers and traders are headed in to tomorrow’s reports expecting an overall negative tone. According to AgWeb’s current poll, 70% of the nearly 400 respondents are expecting the general theme to be bearish for the ag markets.
Kevin Van Trump, president of Farm Direction, says most in the trade are looking for bearish production numbers for both corn and soybeans. "With everyone leaning over the bearish side of the boat, any bullish type number would quickly throw a few of the bears overboard," he says.
"My hunch is both corn and beans could quickly bounce back higher on the initial knee-jerk reaction to the downside," Van Trump says. He says demand for both corn and soybeans are starting to gain momentum.
2. A Really High Corn Yield
Dustin Johnson, a broker with EHedger, says he thinks the biggest surprise could be a higher corn yield. "This would be especially bearish because we don't believe the demand estimates can be increased from current levels," he says. "Any extra production should immediately add to final 2013 carryout."
Johnson notes that a recent Reuters Poll says the average analyst is guessing about 158.9 for a national corn yield and a harvested acre loss of about 1 million. "We think the yield estimate is too low considering the favorable crop ratings and harvest reports," he says. "Ultimately this could set the market up for disappointment, which may result in a bearish reaction for corn." Johnson says his group believes the average yield will be closer to 162 bu./acre.
3. Low Corn Yield