Corn with money

The first scheduled market movers of 2020 come on Jan. 10, when the USDA releases multiple reports.

John Payne of Daniels Trading said having the WASDE and grain stocks reports come out on the same day can cause some volatility and confusion, as both bring a lot of important new information to the markets.

“Those are the reports you have to watch for because you get these multiple statistical agencies bringing in data,” Payne said. “If the WASDE would be unchanged, it doesn’t mean that they couldn’t lower the grain stocks a little bit, so there’s a lot of moving parts of the balance sheet.”

Payne said he’s interested in whether the USDA is able to put a figure on how much demand the United States can expect out of China moving forward, and there’s a chance that could start to be reflected in this report. He said demand increasing would be more important to the markets than supply decreasing in these reports.

“The one thing about corn demand being low and being lowered really going back to the summer reports, it’s kind of nice because it’s lowered the bar,” he said. “We can easily see 200-300 million bushels over the next couple of reports added back to the corn balance sheet, and then the same with soybeans.”

He said increasing demand typically means it is here to stay for the long term.

Mike Zuzolo of Global Commodity Analytics said he is interested in supply numbers, and any reductions that might come due to fewer harvested acres in the U.S.

“It means that there’s less supplies around the world to be able to supply the global demand and that the U.S. in particular has less supply,” Zuzolo said. “It’s going to be more difficult for the U.S. to meet the Chinese demand numbers that we’ve talked about.”

Payne said he doesn’t expect much of a yield change in the upcoming reports — maybe a bushel or two in either direction. That would mean the carryout for these crops is “topped” for now, he said, due to the expectation that supply shouldn’t be changed while demand should only rise.

Zuzolo noted that while yields may not change much, if harvested acres are down as expected, that will affect the final production numbers on the supply side of the equation.

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