No USDA Reports Creates Excitement in the Markets


By Sara Schafer, Top Producer, Editor

via AgWeb - Jan 4, 2019


Let’s hope the rest of 2019 will be as friendly to the grain markets as the first few days were. For the week ending Jan. 4, corn prices were up around 7¢ and soybean prices were up 20¢ to 25¢.


“Who would have thought we’d have a weather market?” asks Jerry Gulke, president of the Gulke Group. “But we’ve got one in South America creeping in.”


This is causing firms to lower their estimates of the region’s crop estimates. For example, INTL FCStone has dropped its estimate for Brazilian soybeans production to 116.25 MMT. That compares to USDA’s estimate of 122 MMT, as of the December WASDE report.


China has started buying soybeans from the U.S., Gulke notes. That combined with these lower estimates of South American production has propped up soybean prices.


“You can solve the oversupply problem with a significant problem in South America or a moderate one and then have China come in and buy grain—whatever they're going to do with as long as they get it out of our country—and that helps,” Gulke says.


The partial government shutdown has prompted USDA to delay release of the Crop Production Report and World Agricultural Supply and Demand Estimate (WASDE) originally scheduled for next week.


“A lot of the traders and people who rely on this information are wondering if we’ll get a big batch of good news all of a sudden,” Gulke says. “Now you have the government looking at weeks worth of data. I think that unknown out there has a lot of people spooked. Could we get along without the USDA reports? Fundamentalist are certainly flying by the seat of their pants leaving analysis depending more on the technical aspects (price movements).


It’s going to be a wild year...


more, including audio report [8:29 min.]