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End of the month onslaught

Agriculture.com Staff 06/29/2006 @ 2:17pm

There's a set of important USDA reports tomorrow and the market has spent the week positioning itself for the onslaught of data.

After a weather-induced Monday sell-off, corn and soybean prices have spent the past three days rallying. Of course, there's also the end of the month, end of the quarter, pre-delivery liquidation going on. The net effect is that prices have not changed much from the end of last week.

The USDA reports include planted acreage and quarterly grain stocks in the morning. In the afternoon, there will be a quarterly hogs and pigs report.

Since the completion of a relatively smooth planting season, the market has had high anxiety about tomorrow's acreage report. A private estimate early in the month seemed to indicate farmers had planted more acres to corn than previously thought. Perhaps the pre-report estimates have helped reduce uncertainty, but there is still a feeling the market may not make big moves until after the numbers.

Of course, the grain stocks numbers will help refine corn-feeding estimates, which in turn will help analysts get a handle on future feeding in the face of increasing DDG production. The afternoon hog report will also help with future feed estimates.

While this has a certain demand flavor, the grain stocks numbers for wheat and soybeans will provide supply clues. For wheat, since it's the end of the crop year, the market will see the final 05-06 year carryout. For beans, the number should be record large and will underscore the massive mountain of supply.

There's a set of important USDA reports tomorrow and the market has spent the week positioning itself for the onslaught of data.

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