USDA's January Crop Reports Traders' Focus This Week

January 5, 2014 11:55 PM

What Traders are Talking About:

Overnight highlights: As of 5:45 a.m. CT, corn and wheat futures are trading 1 to 2 cents higher while beans are fractionally to 3 cents higher through the July contract. A mildly firmer tone is expected to continue this morning, though buying interest wasn't strong enough overnight to give me much faith in that forecast. Cattle futures are called mildly lower on profit-taking, while hogs are seen opening with a mildly firmer tone this morning.


* USDA January crop reports on traders' radar. Much of this week's price action is likely to be position evening ahead of Friday when USDA is scheduled to release a barrage of reports. In addition to its monthly Supply & Demand Report, USDA will issue its final 2013 crop estimates for corn and soybeans, along with the Quarterly Grain Stocks and Winter Wheat Seedings Reports. Dec. 1 corn stocks are the data traders are cautious about as this is the figure they've consistently missed by a wide margin with their pre-report expectations.

The long and short of it: Given the barrage of reports, there's bound to be a surprise for someone. The January crop reports typically set the price tone through the end of winter before attention turns to spring plantings.

* Brrrr! It's cold!. Temps are well below zero across the country's midsection this morning, with wind chills dipping dangerously low. In addition, the eastern Corn Belt is dealing with ice and snow that fell on the region yesterday. The inclement weather is a threat to the winter wheat crop, though the snow should provide some insulation. Livestock across the Plains and Midwest will also be stressed. Very little livestock movement is expected today due to the dangerously cold conditions and snowy roads, but the arctic weather will also slow weight gains and could cause some death loss.

The long and short of it: Weather is mildly supportive for wheat and livestock markets this morning. But it's not enough to trigger active buying interest.

* China not worried about a bird flu outbreak. Chinese officials confirmed two new human cases of H7N9 bird flu over the weekend, one in the eastern province of Zhejiang and the other in Shanghai. Meanwhile, samples taken from a live poultry market in Guangdong tested positive for H7N9. Despite the rising number of bird flu cases, Chinese health officials say the risk of a widespread outbreak of the bird flu virus remains low.

The long and short of it: China has historically "talked down" instances like this, so the lack of concern by health officials should be taken with a grain of salt. Key to this situation is how many bird flocks are culled, as this will determine the impact to feed demand.


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