USDA's October Crop Reports In Focus This Week

October 8, 2012 12:55 AM

What Traders are Talking About:

* USDA October crop estimates awaited. USDA will release its October Crop Production and Supply & Demand Reports on Thursday, which will be traders' fundamental focus this week. Based on the average pre-report trade guesses, traders anticipate a smaller corn crop estimate than last month, while the soybean crop forecast is expected to increase. Projected 2012-13 ending stocks are expected to trend in the same direction -- down for corn and up for soybeans -- compared with last month.

The long and short of it: Virtually everyone is looking for a bigger soybean crop estimate, meaning a steady or smaller crop forecast would be the potential biggest surprise. But a bigger crop doesn't necessarily mean bigger carryover as there is justification for USDA to raise its export projection if supplies are greater.

* World Bank slashes Chinese growth outlook. The World Bank says China's economic slowdown could worsen and last longer than many expect. The World Bank now forecasts Chinese 2012 GDP at 7.7% compared to its previous outlook for 8.2% growth. For 2013, the World Bank lowered its Chinese GDP forecast to 8.1% from 8.6% previously. Despite the downgraded forecasts, the World Bank still expects a soft landing for China's economy and sees small odds of a hard landing.

The long and short of it: The reduced Chinese growth forecast sparked a general "risk-off" stance in global markets overnight and is weighing on corn and soybean futures to start the week.

* Columbus Day reminder. Most markets, excluding bonds, are open today, while government offices are closed for Columbus Day. Grain and livestock markets will observe normal trading hours.


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