Home / Markets / Markets Analysis / No surprises seen in USDA report, traders say

No surprises seen in USDA report, traders say

Agriculture.com Staff 11/07/2008 @ 2:23pm

With the idea that Monday's USDA Production report will be bearish for the corn market, bullish for soybeans, the CBOT floor traders seem to agree on pre-report estimates for the first time in months.

The USDA November Crop report will estimate world grain crops as well as U.S. production.

Trade averages for the U.S. soybean crop are 2.927 billion bushels with a yield of 39.3 bushels per acre. The USDA forecast 2008 production of 2.938 billion bushels on a yield of 39.5 bpa in October.

Corn is estimated at 12.050 with a yield of 154.1. The USDA forecast 2008 yield of 153.9 bpa for production of 12.033 billion bushels in October.

Ending stocks are guessed at 191 million bushels for beans, 1.175 billion for corn and 590,000 for wheat.

On Friday, The Linn Group released bullish estimates for both corn and soybeans for Monday's report.

The Linn Group estimates U.S. soybean production at 2.913 billion bushels, with an average yield of 39.2 bushels per acre. The USDA forecast 2008 production of 2.938 billion bushels on a yield of 39.5 bushels per acre in October.

U.S. corn production is estimated at 11.909 billion bushels, with an average yield of 152.3 bushels per acre, according to The Linn Group. The USDA forecast 2008 yield of 153.9 bushels per acre for production of 12.033 billion bushels in October.

Despite a few private firms estimating a larger corn crop and lower soybean yields vs. the average estimates, most of the trade sees Monday's report in the same light.

Matt Pierce, a CBOT floor trader with Futures International LLC, says Friday’s soybean market signaled the trade’s report agreement.

"The front end of the January futures contract, trading much higher than the November contract, is showing many believe the soybean yields are coming down," Pierce says.

Pierce adds, "For corn, with thoughts of USDA adding a half bushel onto the corn yields, the market is preparing itself for a bearish report. The corn harvest weather concerns won't be reflected until the next USDA report."

There doesn't seem to be any belief the USDA will pull a surprise on Monday.

"There would be no reason for a surprise. It does seem that everyone is in agreement on these numbers for the first time in months," Pierce says.

Glenn Hollander, Hollander & Feaerhaken, agrees the USDA report should be as expected with no surprises.

"Keep in mind, if the stock market is down 500 points, and the corn number is bullish, nobody is going to care about the USDA report. And if the stock market is up 500 points, and the corn number is bearish, nobody is going to care either," Hollander says.

With the idea that Monday's USDA Production report will be bearish for the corn market, bullish for soybeans, the CBOT floor traders seem to agree on pre-report estimates for the first time in months.

CancelPost Comment
MORE FROM AGRICULTURE.COM STAFF more +

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Cool Tools Christmas Edition: Part 2