USDA report will have to be believed
Another round of USDA reporting on the 2019 crop is due Friday at 12 noon ET. Some analysts are guessing it will be a bullish report showing a reduction in corn production due to all the weather issues during the planting and growing seasons. But there are those taking the opposite view also, according to Arlan Suderman with INTL FCStone.
“The trade is worried about what the size of the crop is right now, and I think going into Friday’s report they’re worried about if the crop is getting bigger,” he said. “They’re getting such a mixed message from the harvest results they don’t know what to believe and they want to hear something from USDA.”
This report from USDA will bring more real ‘from the field’ data than previous reports because of the late season. That could bring with it an element of more believability.
“It’s not going to answer all the questions, but the crop is far enough along. We have harvested enough of it, so between farmer surveys and objective field surveys and the maturing of the crop, we should be able to get enough data available for USDA to give us an answer that we have more confidence in. I think ultimately January will have more confidence than November, but this should give us some better answers on the supply side of the balance sheet. How bad did the freeze hurt? How did the crop respond to the challenges throughout the growing season? What about low test weights, which are highly variable across the Midwest with some really poor test weights as well as some pretty good test weights.”
Suderman explains USDA will combine data from field sampling and farmer surveys of actual harvest results to provide what should be better answers than the industry has had to date.
Suderman is chief commodities economist with www.INTLFCStone.com.
