Which USDA reports are the most important?

By Jon Scheve, Superior Feed Ingredients, LLC

The upcoming March 31st USDA report is highly anticipated for several reasons:

  • It provides the estimated remaining stocks stored on farms and at commercial elevators.
  • It shows how tight stocks are and if price rationing is necessary.
  • It includes the first official planting intentions estimate for the upcoming year based upon surveys filled out by producers in early March.

Last month the USDA Economic Outlook Forum estimated 92 million corn acres and 90 million soybean acres would be planted in 2021. However, these are budgetary derived numbers and not based upon actual producer surveys. Therefore, the market will be comparing these estimates and other private estimates until the March 31streport. Prices will then adjust accordingly.

How important is each USDA report?

Many people say the end of March report day is important, and it is, but how does it compare with other reports throughout the year? Which ones on average impact the market the most and least over the year? I’ve ranked each of the 15 report days in order of importance, based upon my opinion, and provided rationale for why and how the market and farmers can be impacted by each one.  

#1 — End of June Stocks and Planted Acreage Report

This is the most important report day of the year because it provides the first real estimate of the final planted acreage for the upcoming harvest. This is significant, because a million-acre swing of one crop is equivalent to a 2 bushel per acre national yield change. The report also includes estimates of old crop supply remaining in storage and expected upcoming carryout.

#2 — August WASDE (World Agriculture Supply & Demand Estimates)

This report usually provides the first glimpse of expected national yields after corn pollination is complete. This combined with planted acre estimates from the end of June acreage report gives the market a clearer picture of next year’s supply potential. 

#3 — January Report

Despite yield estimates from August through November, this report shows final national yields for the fall harvest. Plus, it includes the first stocks report of the new crop.

#4 — End of March Planting Intentions and Stocks Report

Detailed above.

#5 — May WASDE Report

This report provides the first look at new crop demand and yield potential, which provides a baseline the market will work against for the year. After this, going forward, the perceived weather variability and its impact on supply and demand generated from this report will cause fluctuations in the market.

These top 5 reports have by far the biggest impact on the market. The next 9 report days may have some impact on the market, but it’s usually much less. 

#6 — July WASDE Report

This provides updated stocks and planting acreage mix from the end of June report. There are rarely yield changes in this report, and when there are it only makes the August report more anticipated.

#7, #8, #9 — September, October & November WASDE Reports

These 3 are combined because while yield trends are updated monthly from the August report, they aren’t generally big market movers. Even if there is a big adjustment in one of them, or a trend is spotted, the January report will still overshadow them all.

#10 — April WASDE Report

This report is overshadowed by the March 31st Planting Intentions and Stock Report because it doesn’t include new crop supply and demand figures yet like the May report. That’s why it remains lower on the list.

#11 — June WASDE Report

This report may have minor supply and demand adjustments for both old and new crop, but it’s too early for weather to impact and change new crop yields. The market will instead be focused and waiting for the biggest report of the year at the end of June.

#12 — September Stocks Report

This is the final stocks report of the old crop. It should be a bigger report day, but the numbers provided have already been anticipated and much of the report is a look backward. And since it’s a futures market, there is generally little for the market to react to in the report unless there is a major surprise.

#13, #14, #15 — March, February, December WASDE Reports

These three reports provide few changes to overall U.S. supply and demand estimates. However, as South American competition for global exports increases, these reports may become more important to price direction in the future. Still, they won’t likely ever over-take The Big 5.

Importance of USDA reports

I’m sure some may disagree with my order for a variety of reasons. For instance, speculators and day traders may think every report comes with new opportunities and risk adjustments. Others will complain that USDA reports are a joke or useless. However, it’s important to remember that most market participants DO care what the USDA says and nearly all of the ag economy revolves around the information provided in these reports. That’s why it’s important to pay attention to them, know which ones have the most impact on the market, and what to expect from each one. 

On Wednesday at noon EST the fourth most important report of the year will provide the market with some new information that may or may not impact prices. It has been over 8 years since this report has moved the corn market more than 15 cents and 7 years since it has moved beans more than about 25 cents. A day or two after the report is published, and everyone will shift their focus back to Chinese exports for 1 to 2 months until weather variability becomes a huge market factor once again.

Please email jon@superiorfeed.com with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.

Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not warrant or guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results.

Check Also

How is the acreage battle shaping up in March 31 planting intentions?

By Doug Tenney, Leist Mercantile Corn locked up the 25 cent limit. The report was …

Leave a Reply

Your email address will not be published. Required fields are marked *