What is in this article?:
- Markets waiting for Jan. 12 USDA reports
- Larger than expected
• The Jan. 12 USDA reports, along with crop development in the southern hemisphere, will set the tone for the markets into the spring, says a University of Illinois agricultural economist.
• There is added price risk when so much information is released at one time.
• Given the recent history of USDA reports, an important surprise cannot be ruled out.
On Jan. 12, the USDA will release a number of reports containing important information for the corn, soybean, and wheat markets.
These reports, along with crop development in the southern hemisphere, will set the tone for the markets into the spring, said a University of Illinois agricultural economist.
“There is added price risk when so much information is released at one time,” Darrel Good said. “New estimates and forecasts may provide a consistently positive or negative scenario or they may provide mixed signals that the market will have to sort out. Given the recent history of USDA reports, an important surprise cannot be ruled out.”
Good provided the following commentary on the anticipated USDA reports:
The Crop Production report will contain final estimates of the size of the 2010 corn and soybean crops. Changes, if any, from the November forecasts are expected to be small. Changes would most likely be in the yield estimates since administrative data has already been incorporated in the acreage forecasts.
However, since the December producer survey is much larger than earlier surveys, acreage changes cannot be ruled out. In the previous 10 years, the change in the corn yield estimate in January has ranged from 0.1 bushel to 2.4 bushels and averaged 1.1 bushels. For soybeans, the change has ranged from 0.1 to 0.7 bushel and averaged 0.3 bushel.
The Grain Stocks report will contain estimates of the Dec. 1, 2010 domestic inventory of all the major crops. The most interest will be in the estimate of the corn inventory. This is always the case since the report provides the first indication of the feed and residual use of corn during the first quarter of the marketing year. The report takes on added significance this year because the previous two quarterly stocks reports (June and September, 2010) held surprises.