A first in ag markets
Next week, everyone will have the opportunity to trade through a USDA crop report. This is a first in the agricultural world, although we have been dealing with other types of government reports--think the weekly jobless claims, crude oil inventories, statements from the Fed--during market hours for several years.
So, the oldest markets (corn, wheat, etc.) will participate in this process, too. Remember, the CBOT will open up pit trading also on Tuesday at 7:20 a.m. Tuesday’s report includes an updated, survey-based wheat crop number, updated world crops and possible changes in the U.S. supply/demand tables. Reaction may not be as wild as some months in the future. The August report, with the first real estimates of crop sizes for corn and soybeans, could set off fireworks.
So far the CBOT has not said it will open pit trading early for the three grain stocks and acreage reports which are at the end of quarters (March, June and September). The December quarterly report is released late--at the same time as the final January crop numbers. These are the reports which have produced limit moves during the trading day.
World crop watch:
Russian and Kazakh wheat: of particular concern is the spring wheat area in the east, which has been dry and hot. Because it is spring wheat, weather issues will affect the crop for a longer period. Some rain has fallen in the west to shrink the size of the concern, but the concern continues. Exports from this area may be reduced which will shift buyers to U.S. wheat. This has the potential to increase U.S. exports.
North China Plain: this crop area in China includes Shandong, the largest winter wheat state and a very large corn grower. This area is also hot and dry. The states farther north, such as Heilongjiang (the largest soy producer), are now getting better rain.
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.