Much Interest in New Supply and Demand Numbers
Economy is a major factor for markets.
Jason Vance
Published: Feb 10, 2009
The USDA is releasing its monthly crop report Tuesday morning that will have updated numbers on world supply and demand. There is a lot of interest in this month's report, which according to World Agriculture Outlook Board Chairman Gerry Bange, is due to the fact that world and domestic economies are having a major effect on the markets.
"Clearly demand is an issue, consumption is an issue: we've seen some mill use numbers on cotton for example, which were extremely low," Bange said. "We know there are issues in the dairy industry where we have seen prices plummet. So the analysts here are very, very busy looking at what's going on in regard to these commodities."
Of particular interest Tuesday will be grains and oils. Bryce Knorr, Farm Futures senior editor, says he doesn't expect much change to the markets from the report unless there is a major surprise.
"USDA will probably increase its estimate of corn stocks, perhaps 25 to 50 million bushels," Knorr said. "That's what the trade is thinking at least. Our Farm Futures models show that the increase may be more modest due to the stability in the corn export trade recently."
As far as soybeans are concerned, Knorr expects a 20 to 30 million bushel reduction in ending stocks. He says this number will be one of the key things the trade is watching, trying to figure out what the impact the drought in South America is going to be on U.S. export sales."
"For wheat we could see a reduction of maybe 20 to 30 million bushels," Knorr said. "There's not a whole lot going on in the wheat market right now. Exports have been a little bit better than forecast for much of the marketing year, but USDA has been fairly resistant to change that export outlook at all." The USDA February Crop report comes out at 8:30 a.m. Eastern on Tuesday, Feb. 10.
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Tagged: usda, farm, wheat, farm futures, soybeans
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