Finally, some news comes to grain markets; awaiting USDA reports


Wednesday, Jan. 12, USDA will finally release the whole wastebasket of news on this market.

We wait with abated breath the results of their research to see if the trading of the last couple of months makes sense. Then, we anticipate the reaction to the reports.

Wednesday (of course, the day after I have to write this), USDA will give us five reports of interest. They will come out before the market opens, and trading until then will be interesting.

Trading after then will be manic or subdued or placid, depending upon any surprises in the reports.

Why are they important?

The market sometimes hangs on the January reports because of lingering uncertainty about the actual crop sizes. I do not have the sense that we are all that anxious this year, but there is always the chance of a reaction.

Wednesday we will see the final Crop Production Report. Along with that will be the Crop Production Annual Summary.

By this time, we supposedly have all the corn and beans in a position to count them, and have counted them well. We know now what acres were abandoned, and what acres were amazing or disappointing. But, any change from current assumptions can move the market.

Also watching for

More interesting in principle is the World Supply and Demand Report. This will be torn apart as traders look for something unknown or changed to move the market.

Ditto for the Grain Stocks Report. Are there any surprises about what is left in the bin?

Since we are early in the crop year, we are only looking at the chance that usage is slower or faster than expected, or that exports have varied.

Last in the list is the Winter Wheat Seedings Report. What acres are out there? Is the report consistent with expectations?

Hold on

Then the games begin. At 10:30 a.m. our time, the markets begin to react to whatever news is gleaned from this mess of information.

As usual, the news is not the thing, it is the twist that is important. Maybe the crop size is off a little from last month. Does that matter, or was it already in the market?

Is there more wheat in the world than we realized? Is there less wheat, but that is why wheat has rallied back to the high? Of course, wheat is now 50 cents off the high, so what does that mean?

And on, and on.

As usual, I like to get positions as even as possible and bet nothing on report days. I have encouraged sales, especially of corn, ahead of the report. By the time this is read, we will know if that was right.

Still erratic

This week prices on the Chicago Board of Trade have continued the erratic pattern of the last few months. Corn finished the last leg up and then made a big correction. The real recent low was back the end of November at 5.20 1/4 for March futures. The high was the first trading day of the year, at 6.34, nearly $1.14 higher. By the 7th, however, we were back to 5.95, a break of 39 cents.

The last two days we have seen a bounce from the correction to the overnight going into Tuesday at 6.12.

The March beans have been mostly higher since the mid-November low at 11.83. We made the New Year’s high at 14.09, $2.26 higher! Amazing! We are currently at 13.85-1/2.

The wheat rallied from the mid-November low at 6.56 1/4 March futures to 8.25 on the 3rd of the year. After a break to 7.66 1/4, we are trading 7.76 currently.


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Marlin Clark is an associate of Russell Consulting Group, with a local office in Williamsfield, Ohio. Comments are welcome at 440-363-1803.



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