USDA’s December round of Crop Production and World Agricultural Supply and Demand Estimates reports is typically a non-event. But, USDA has been known to provide the market with a few surprises every now and then.
At 11 a.m. CDT on Tuesday, Dec. 10, USDA will release this month’s reports. What information or revisions could move the markets? Four grain market experts share their thoughts on what farmers should watch for in the reports.
Kevin Van Trump, president of Farm Direction
These reports might have a little bullish feel, assuming USDA makes a few higher demand adjustments. I suspect soy exports are moving higher, and wouldn't be surprised to see the same for corn exports and possibly even a hair higher for ethanol usage.
A potential surprise would be USDA making bullish adjustments to demand but choosing to leave the supply side of equation "unchanged" until the January end-of-year report. If this plays out this way, the bulls could get a false sense of security only to see the rug pulled out from under them in January. Don't fall into this trap! Use the rallies to reduce more risk.
Read Van Trump's blog.
Tim Hannagan, grain analyst at Walsh Trading
The reports will be neutral to bullish for corn as export completion looks smaller out of Brazil and Argentina lending to a lower carry over number. Also higher feed usage and good corn-to-ethanol use all cuts carryover.
The trade is expecting lower carryover for beans as present demand is at a record pace. I see it friendly at best and a carryover number unchanged to only fractionally lower as USDA sees a seasonal period in January and February, where U.S. demand falls sharply and South American ports take future deliveries.
The biggest surprise would be a large cut in bean carry of 25 to 60 million bushels.
Read Hannagan's blog.
Rich Nelson, Chief Strategist at Allendale
This week’s reports will only have a minimal impact on prices. USDA will only make marginal changes to demand and no changes to production on this report. January is THE report here. December is typically a yawner.