The News & What it Means – Friday’s USDA Report is Important but so is the Bigger Picture!

By John DePutter – August 8, 2018

 

The news:

USDA report expected to make or break the markets

If you are reading the news in our morning reports, you’ll know most analysts and market-watchers are expecting the Aug. 10 USDA report to bump up its yield estimates for corn and soybeans.

 

In its monthly supply-demand reports of the past three months, the US government has been projecting an average corn yield of 174 bu/acre and an average soybean yield of 48.5 bu/acre. These projected yields are based on calculations taken from previous years with an adjustment factor for a rising yield trend.

 

Importantly, the Aug. 10 report will be different: it will be based on surveys and field-gathered data. A lot of predictions are circulating about what it will say.

 

What it means:

The report will mean a lot for corn and soybean prices, no doubt.

 

It could cause big price moves, especially if the yield forecast are sharply above or below the expectations.

 

It could also provoke a lot of debate. Some analysts are putting a great deal of effort into figuring out what the government will say and/or what they think the government should say.

 

Again, there’s no question that reports such as this are important factors. They do have an impact on your prices and profits. But…

 

Don’t get too caught up in the debate

Before you get too caught up in the details on whether the USDA’s statistics are right or wrong, and before you get too rattled by the market volatility…consider this: it’s important to step back and take a look at the big picture too.

 

And in the big picture, a one or two bu/acre yield difference isn’t really all that terribly important.

 

At the DePutter office, we regularly encourage subscribers to not get too caught up in the daily noise and hype and to keep the big picture in mind.

 

Check in on big picture now and then…

When it comes to checking in on the big picture, one thing that’s helpful is knowing whether the crop futures markets are trading in the upper or lower ends of their probable long-term ranges.

 

From time to time, the DePutter service lays out this visual aid. We present pictures of the probable trading ranges and show where the markets are at the current time.

 

Sometimes our ideas on the upper or lower ends of the ranges turn out to be right on, and other times not precise, but more times than not, this exercise offers a pretty fair idea of the price parameters going forward. It’s not rocket science – it’s just a quick look at long-term chart support and resistance.

 

So… where are the markets now? Are they near their highs or lows?

Last week we issued our latest update on the anticipated ranges for the crop futures markets.

 

The report was sent to subscribers to our Ag-Alert service (for farmers in Ontario and Eastern Canada) and to the DePutter Market Advisory service (for Westerners).

 


For a LIMITED TIME we are offering this

special report FREE to other readers too.

 

Click here to send an e-mail requesting your copy of this report.

 

Please include your contact details such as your province and your name (farm name if applicable).