What to Expect From This Friday’s Agricultural Data Bonanza

Updated on
  • USDA issues final 2017 crop estimates, Dec. 1 inventories
  • Wheat planting report also due; analysts expect a 109-year low

Farm hands stack bales of straw as they are collected in a field of where soft red winter wheat has been harvested in Kirkland, Illinois.

Photographer: Daniel Acker/Bloomberg 

A wall of data will hit the grain markets at noon on Friday in Washington when the U.S. Department of Agriculture releases several major reports. In addition to its latest monthly World Agricultural Supply and Demand Estimates (WASDE), the agency will publish quarterly inventory numbers and its winter-wheat plantings report. Here are some things to look for.

UPSIDE SURPRISES

Any price reaction on the day could be to the upside, as the consensus view in corn, soybeans and wheat is almost uniformly bearish following years of surplus supply. Hedge funds and other large speculators hold the largest bearish bet on grain prices before a January report since data began in 2006.

CARRYOVER 

When looking for changes in the estimates for last year’s U.S. crop production, or revisions to demand forecasts for this year, perhaps the the first place to start is the WASDE inventory numbers -- also know in the market as the carryover (because it’s the grain "carried over" from the last harvest). The USDA will say Friday that soybean carryover is 479 million bushels, according the average of analysts surveyed by Bloomberg, up from a December projection of 445 million, as the pace of U.S. exports has been slower than expected. Corn and wheat carryovers are likely be little changed from last month, the survey also shows, but there too, shipments of both crops are behind the pace needed to reach last month’s USDA forecasts.

For a full breakdown of analysts’ estimates for the WASDE report, click here

QUARTERLY INVENTORIES

In addition to the WASDE report, the USDA’s quarterly inventory report is a big deal for traders. The numbers help the USDA cross-check its final corn and soybean production forecasts for last year, plus the estimates for domestic use and exports, while also providing a valuable insight into how much unsold grain American farmers may still control. Friday’s report will probably show domestic corn and soybean stocks held by commercial grain companies and farmers as of Dec. 1 stood at record highs, according to analysts surveyed by Bloomberg. Slow exports and weak cash prices signal that farmer ownership of corn and soybean stockpiles at the start of December probably increased from the year-earlier levels of 61 percent and 46 percent respectively.

Corn, Soybean Reserves at Record

Sluggish first quarter export shipments boost U.S. inventories

Sources: USDA and 2017 Bloomberg Survey

SHRINKING WHEAT

Wheat is a very unattractive crop for many U.S. farmers right now. While average hard red wheat prices rose last year for the first time since 2012, they’re still less than half the level five years earlier. The USDA is expected to say that planted acreage for the current winter wheat crop in the U.S. fell a fifth straight year to 31.5 million acres, the lowest since 1909, the survey shows. A larger decline in wheat sowings will signal farmers may plant more corn, soybeans and other crops on those abandoned acres. 

U.S. Wheat Acres Lowest Since 1909

Farmers likely cut plantings amid low prices, slow exports

Sources: USDA, 2018 Bloomberg Survey

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