Written by Patrick Garrity and Mark Soderberg | Grain PhD Ag Risk Specialists
I’m sure you are aware that the USDA releases a number of reports, but do you really understand the data included and what purpose it serves?
At Grain PhD our goal is to educate farmers, and equip you with the tools and information you need to become a better grain marketer. In this article, we will focus on USDA Reports. Understanding these reports will allow you to make more educated decisions in your grain marketing.
USDA reports are closely monitored by traders, like our Grain PhD Ag Risk Specialists, and are important because they can greatly affect price direction in the grain markets. There are weekly, monthly and quarterly reports and each have a varying degree of impact. Although different analysts calculate their numbers regarding grain fundamentals, the USDA is the official outlook.
Weekly USDA Reports
Export Inspections & Sales Report
This report shows the amount each crop was sold to a foreign country for export. There are 2 reports, export inspections that are reported at 10 AM CST Monday and actual sales figures are released at 7:30 AM CST Thursday mornings.
USDA export estimates can change significantly from the beginning of a marketing year until the end. Changes are often driven by changes in production in other countries that the US competes with in the global marketplace. By following the sales pace closely we can better determine if the USDA is more likely to raise or lower their export forecast. Changes to the export forecast have an impact on ending stocks and price discovery.
EXAMPLE
Corn: Net sales of 839,900 MT for 2017/2018 were down 7 percent from the previous week and 46 percent from the prior 4-week average. Increases were reported for Japan (315,100 MT, including 107,800 MT switched from unknown destinations and decreases of 15,600 MT), Vietnam (187,200 MT, including 176,000 MT switched from unknown destinations), Mexico (147,700 MT, including decreases of 2,800 MT), Egypt (144,000 MT, including 40,000 MT switched from unknown destinations), and Saudi Arabia (125,800 MT)
Crop Progress Report
This report is issued at 3:00 CST on the first business day of the week. The information is issued by NASS, National Agricultural Statistics Service. The crop progress report provides an update on the stage of the development of the crop. For instance, in spring it shows what percentage of the crop is planted in each state. By late summer and fall it shows how much of the crop has been harvested. The condition report attempts to illustrate the quality of the crops ranging from excellent to very poor.
Favorable spring weather along with rapid early season planting often leads to more acres being planted and a favorable start to crop development. Conversely poor spring weather and delayed planting often lead to fewer acres and poor development. Crop conditions have historically correlated with yields and production forecasts.
EXAMPLE
Example Weekly Report:
Monthly USDA Report
WASDE, World Agricultural Supply and Demand Estimates Report
This report essentially gives the breakdown of the balance sheet with the main figures being the ending stocks number. ( ending stocks are the amount of grain left over after all demand has been satisfied) On one side you are showing the supply with production and imports and on the other side is the demand which is domestic use and exports.
The remaining monthly USDA Reports in 2018 will be released at 11AM on May 10th, June 12th, July 12th, August 10th, September 12th, October 11th, November 8th, and December 11th.
EXAMPLE
USDA 2017-18 U.S. grain and soybean ending stocks:
USDA World Production
Quarterly Report
Quarterly Grain Stocks Report
This report is based on estimates from surveys – the surveys are conducted during the first two weeks of December, March, June, and September, with separate surveys to obtain the on-farm and off-farm estimates. Producers are asked to provide the total quantities of grain on their operations as of the survey date. The information includes all grains and oilseeds stored.
The remaining quarterly USDA Reports in 2018 will be released at 11AM on June 29th and September 28th.
To receive further analysis or help with these reports, call 1-844-471-4601 to speak with an Ag Risk Specialist.
The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.