Nogger's Blog

09/11/10 -- It's a big day today with the USDA out with their latest production and stocks data. We seem to have a two-tier market developing these days. What do we think the real numbers are? And what do we think that the USDA will say that the real numbers are?

As can be seen lower down on this blog, the trade is forecasting corn yields down a little over a bushel an acre this month and corn production down around 110 million bushels. Soybean yields and production are called slightly higher than last time. Ending stocks are seen lower on both.

A significant portion of the trade seem to believe that whatever corn figure the USDA come up with, it will be erring on the side of caution and that the reality of the situation is in fact worse ie. final output WILL be lower than whatever they say today.

Production numbers from around the world will also be scrutinised this afternoon. As ever there will be plenty who's own Chinese production and stocks estimates, for both corn and wheat, will be substantially lower than the ones served up by the USDA.

Whether the market really believes the USDA numbers or not, it usually but not always, trades them as if they are fact. For a while at least.

What they will throw at us this afternoon is anybody's guess, what is a fairly safe bet however is that it will be inaccurate. Good game this isn't it?

If it's bearish then I think the market will see any downside as a buying opportunity, if it's bullish then I think it will merely vindicate the bulls that they were right all along.

So we might not trade higher tonight, but we probably will be higher by this time next week whatever happens. IMHO.