Traders will want to check corn and bean numbers from abroad and U.S. ending stocks when the USDA report is released Friday.
The USDA will release its monthly crop production supply demand report showing:
- production numbers for corn and beans in Argentina and Brazil
- U.S. ending stocks, or amount of grain expected to be left over at the start of the new grain marketing year Sept. 1
It essentially represents our grain savings account. Futures prices are very sensitive to changes here as supply-side fundamentals for the new crop year remained vastly uncertain.
The first look at potential new supplies come with the March 30 USDA planting intention report when farmers surveyed release their numbers as to how much spring wheat, corn and beans will be planted this spring.
WHAT TO EXPECT
The USDA is expected to raise export projections and lower ending stocks in Friday's report for two reasons.
- Weather in South America was less than favorable for yields with a seven-day heat dome. Temperatures were over 100°F daily, offsetting any marginal prior rains.
- The other issue was February exports for corn were up 1.118 million metric tons over January, and bean exports 335 thousand metric tons.
Note, the USDA has room to offset any changes in the stocks number, with adjustments from corn-based ethanol and feed usage. The grains have rallied into the last five monthly reports only to fall back on profit-taking after each one.
MORE IMPORTANT REPORT
There's one caveat to remember here. We have an even more important report 15 days later - the March 30 planting intention report.
This not only limits the downside correction past the March 9 report, but it limits the time to do it. Attention will turn quickly to the March 30 report.
IN THE END
Look for a post report correction as a buying opportunity for corn and beans with next week's low holding through to the month-end report.