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Winter calm

Agriculture.com Staff 12/05/2007 @ 3:12pm

Next week's USDA reports will not contain any new US crop production data. There may be changes in some southern hemisphere crops-Argentine wheat, for example. So any changes to the supply/demand tables should be minor.

The crucial data will be in January, with the final corn and soybean production numbers and the quarterly grain stocks report. That data will produce a long lasting tone for the markets.

With light holiday volume soon approaching, prices may have a hard time making big moves, unless South American weather concerns intensify or unexpected large export sales occur. The end of the year may see some position squaring or profit-taking, but is typically not a time for large new bets on market action.

China, as usual, seems to be the important market participant to watch. There are many signs that China is doing more different things to cope with food inflation. Their soybean purchases are larger than last year's. They have recently auctioned off 6 million metric tons of state reserve wheat supplies for the domestic market. Next week, they will apparently auction corn. Next summer, during the Olympics, the government wants to make sure economic times are good, so the focus is on sports, rather than the price of pork.

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.

Next week's USDA reports will not contain any new US crop production data. There may be changes in some southern hemisphere crops-Argentine wheat, for example. So any changes to the supply/demand tables should be minor.

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