Focus On USDA Reports This Morning

September 12, 2011 01:05 AM
 

What Traders are Talking About:

* September crop reports to set the price tone for the week. Traders are widely expecting USDA to lower its corn and soybean crop estimates from last month, with the average trade guess at 12.505 billion bu. for corn and 3.025 billion bu. for soybeans. Last month, USDA's first survey-based estimates came in at 12.914 billion bu. for corn and 3.056 billion bu. for soybeans. Traders are expecting old-crop corn and soybean ending stocks estimates to be higher than last month, but new-crop carryover projections to be lower than August.

The long and short of it: Traders are anticipating a friendly report for corn and soybeans, which makes it harder to get a (sustained) bullish reaction.

* Greek default concerns heighten -- again. Greece says it has cash supplies for only a couple more weeks and there are heightened concerns the country may not meet its obligations to qualify for the next batch of bailout funding. The country announced a new real estate tax on Sunday in an effort to come up with cash shortfalls. In addition to the Greek concerns, investors were disappointed the G7 meeting ended over the weekend without any solid plans for how to solve the global economic situation. Global stock markets and U.S. stock futures were under heavy pressure overnight amid the escalating concerns. The CAC (French stock index) was hit especially hard given French banks' exposure to Greek (and Italian) sovereign debt and the possibility Moody's could downgrade credit ratings for the country's three largest banks.

The long and short of it: If the USDA data isn't solidly bullish, grain and soy futures will be vulnerable to pressure from weakening macro-economic conditions.

* Potential frost threat later this week. Forecasts call for temps to dip below freezing across areas of the Upper Midwest the second half of the week. As a result, there's potential for frost and a light freeze over the Dakotas, Minnesota, far northern Iowa, Wisconsin and Michigan. The coldest temps are forecast for Thursday and Friday morning.

The long and short of it: A major frost/freeze event doesn't currently look likely, but traders will keep a close watch on this throughout the week.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

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