August 2020 USDA Supply & Demand

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The tables below give the average and range of trade estimates compiled for today’s reports. As of last week, traders expected bigger crops and the USDA sure didn’t disappoint with today’s bigger than expected yield estimates.

The USDA estimated the corn crop at 181.8 bushels per acre, up from trade at 180.5 and a soybean yield estimate of 53.3 bushels per acre, up from trade at 51.2.

The only thing is, traders don’t believe their big numbers anymore, let alone today’s big USDA estimates. The Derecho had a destructive impact on several million acres. See the satellite image below. Farmers in those areas tell us crops were hurt.

On the USDA demand side, corn use was increased 150 million bushels and soybean use was increased 100 million bushels.

Today’s price action following the USDA reports signaled that traders no longer expect crops as big as the USDA forecast today. Or traders expect demand to continue strong enough to prevent price decline.

Our Key Market Indicators are all loaded up on the Buy side. That occurs when prices have been under substantial pressure and toward the lower side of the annual price range. When a market in this condition gets a negative report, prices should collapse.

If negative markets don’t go down on bad news, it suggests the negative news has been adjusted into the price.







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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.