While the December USDA reports did little to alter the fundamental picture of the crop markets, the January reports will provide much more information, said a University of Illinois agricultural economist.

“On Jan. 12, the USDA will release the final estimates of the size of the 2010 U.S. crops as well as the Dec. 1, 2010 grain stocks,” Darrel Good said. “With small projected year-ending stocks of corn and soybeans, modest changes in the production estimates could have a large price impact.”

Good said the report provides the most information for the corn market because it allows a calculation of domestic use during the first quarter of the marketing year.  

“Based on weekly estimates of ethanol production, ethanol use of corn in the first quarter of the year was 16 percent larger than use of a year earlier,” he said. “The likely extension of the blenders’ tax credit for another year suggests continued robust demand for ethanol. The calculated feed and residual use of corn will also be important since there was some confusion surrounding the Sept. 1 stocks estimate and whether or not significant quantities of 2010 crop corn were fed in August.”

An estimate of winter wheat seedings will also be released on Jan. 12. Good said the report will not only be important for the wheat market, but will have implications for the amount of acreage available for spring-planted crops and the potential for double-cropping of soybeans in 2011.

“By mid-January, prospects for South American corn and soybean production and Australian wheat production will also be clearer,” he said. “Corn and soybeans in South America will be in the reproductive and grain filling stages. Between now and then, the most interest will center on Argentina due to the significant shortfall in precipitation in important growing areas since mid-October. And the potential for Chinese corn imports may also be clearer in another month.”

Good said the rapid pace of U.S. and world consumption of corn, soybeans, and wheat; prospects for relatively small year ending stocks; and unsettled weather, partly influenced by the ongoing La Niña weather event, seem to provide a very sound fundamental base for crop prices.