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Market Expects Bearish USDA Report

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Thursday morning USDA releases the October crop production report along with the monthly World Agricultural Supply and Demand Estimates. Overall the trade is not expecting a bullish report for grain futures and that weighed on the soybean market Wednesday.

Wheat was higher Wednesday but corn futures were also weak and analyst Tom Fritz explained that was due in part to harvest pressure, but also concerns about demand.

“Everybody and their neighbor expects to see lower production numbers from USDA,” he told HAT. That does remain to be seen. But the kicker is where’s our demand; we just don’t have any. The wheat market is catching a bid from the idea that we’re going to see a lower world carryout primarily due to lower crop sizes overseas, so wheat is catching a little bit of bid. The last three days this week we’ve seen a fair amount of buying wheat and selling corn, so that’s helping corn.”

The soybean market harvest pressure was confirmed this week with the Tuesday crop progress release by USDA.

“We still have about 42 percent of the harvest to go. USDA improves the bean crop rating so the attitude there is we’re going to have a bigger supply so what will they be able to do to the demand to offset it. That remains to be seen. The bottom line is everybody is getting cued up for a bearish report.”

Fritz adds there is a global element adding to a weaker outlook. “Global economic slowdowns cast a pall over the marketplace.”

Jim Riley at Riley Trading will be anxious to see if there is an adjustment to harvested acres.

“It’s a huge report but are they going to do anything with this harvested acreage or are they going to wait until January? I think they’ve got enough figures in front of them that they certainly could, but I’ve thought that before and got fooled.”

December corn futures Wednesday fell a nickel and soybeans ended the day down over 26 cents. The USDA reports come out at 7:30 Chicago time and 8:30 eastern time Thursday morning.[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/10/Trade-fears-bearish-USDA-report.mp3|titles=Trade fears bearish USDA report]