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From Flood to Drought, This Year Has It All

Traders prepare for the USDA report.

The August USDA Supply and Demand Report (out next Monday) is not often a major market-moving report. But what about this year has been usual? Traders and analysts alike have been waiting for the release of the acreage resurvey since late June. One factor that will be closely watched is how the USDA utilizes satellite imagery in a report for the first time. The method would likely receive negative feedback in a normal year, let alone with this report. I am encouraged to see the USDA trying to update the methods used to formulate these reports. However, excessive moisture at the start of the year now followed by drought conditions for some areas makes the yield estimation process nearly impossible.

See this week's Successful Marketing Newsletter.

The U.S. dollar hit levels last seen in May 2017 last week. This move was short-lived as trade talks with China suffered a blow when further tariffs were threatened. All of the geopolitical headlines are not making it easy for grain traders to focus on the U.S. crop. So far, we have not seen the volatility of the outside markets spill over to the grains. With all eyes on the crop report next Monday, we’ll see if the bulls are able to recover some of the recent losses.

See this week's Successful Marketing Newsletter to see where those prices sit.

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