Thursday, September 12, 2013

USDA Preview

Traders are once again poised for the release of this months WASDE report, with much of the focus on just how much the recent heat has damaged yields.

For me the main point of interest is in soybeans, specifically the reduction in yield.

There are a couple of things to look at. I've personally noted that the USDA has most recently had a tendency to make only small adjustments to yields and ending stocks compared to the market consensus and specifically some of the independent grain analysts.

Something that was also worthy of note in last months report was just how the USDA came up with their figure.

Taking a look at soybeans for instance, the potential for the yield estimate to actually reflect crop damage, being drawn largely from data taken late last month, and using a five-year average for the pod weight, tends to make me think that we might be in-line for a more bearish number.

And as for corn (and some extent soybeans) the actually anecdotal evidence we keep hearing from farmers is that yields are looking quite solid. Another point to the bear camp.

Overall I'm looking for a somewhat bearish report, however I currently have no positions in corn, soybeans or wheat.

No comments:

Post a Comment