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Report first, SA weather to follow

01/10/2013 @ 3:52pm

Friday morning at 11 a.m. (a new time), the USDA will release so many data points that the market will gyrate for awhile as everything is digested.  Traders especially want to see the corn stocks number, which should provide insight on feed use and the degree of rationing (or not) required for the rest of the corn crop year.

There is definitely the chance for surprise with this report, mostly because there is so much data that some number will be out of the ordinary. Limit moves are common for the January report day.  

However, with the data for the 2012 crop complete with this report, there should also be a fairly quick shift of focus to the upcoming new crop situation.  The market knows both corn and soybean acreage are likely to be higher in 2013 and forecasts that a return to trend-type yields means lower prices. Although the crops are not even planted yet, the closer it gets to planting season, the more this realization will put traders in a bearish mood for new crop.  And, although farmers haven’t forgotten about the drought, the market can’t make it a bullish reason to move the market higher in January.    

Concerns in the weeks after this data is released will also include how well Brazil executes on its early shipping of soybeans to customers, especially China.  With more confidence in the size of the Brazilian crop, it appears China purchased several February cargoes.  Can these leave the Brazilian ports in a timely manner?  The shipment times from US ports, especially the PNW, are much quicker and US sales could fill in any holes if Brazil gets backed up.    

Later in February is the USDA’s annual Outlook Forum.  The USDA will unveil its first new crop supply and demand estimates, although there will be no actual survey work on which these numbers will be based.  The USDA analysts will “guess” just like the rest!  The first survey of any kind will be the Prospective Plantings report, due to be released March 28th.   

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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. 

 

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