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USDA Reports, round two

Agriculture.com Staff 07/09/2009 @ 9:11am

With the market still reeling from the last set of USDA reports, it is time for another batch tomorrow.

These reports should be greeted with less volatility. The new data the USDA will be incorporating into the reports (stocks, acreage) has been known since June 30th.

The wheat crop estimate could be the most interesting number. This is the first report containing a survey based estimate of the spring wheat crop. Plus many believe there will be an increase in the Kansas crop.

The supply/demand report, however, could be down right dull. There will be changes from the mid-June report, but most analysts had constructed revised supply/demand tables by the afternoon of June 30th and distributed them to clients. The corn stocks suggest lower feed use, for example. The acreage numbers suggest larger crop sizes for both corn and beans. Overall demand for soybeans could increase.

The weather is not a large factor (unusual at this time of year). This leaves "outside markets" with more of an ability to move the markets.

The state of the economy, the value of the dollar, the price of crude/gas-these are all still underlying important factors. Positive economic news and a positive attitude about the economy on many days produce commodity price rallies. When the markets are gripped in economic fear, like the past few days, commodity prices weaken.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

With the market still reeling from the last set of USDA reports, it is time for another batch tomorrow.

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