The week ahead: All eyes on USDA
Monday: Crop ratings. Corn crop ratings stabilized last week and could head downward in the data for the week ended Aug. 10. Spring wheat ratings also declined last week so markets will watch to see if further deterioration has taken place.
Tuesday: the August Crop Production Report. USDA stepped up their sampling for the report which will have the first survey-based estimates of the U.S. corn, soybean and other spring-planted crops. Private estimates came out over the course of the past week as traders geared up for the data.
Tuesday: Trade data update. In the midst of the August Crop Production Report, USDA will also provide another update of the U.S. ag trade situation. A strong export surplus should continue in the monthly update. Plus, details on specific commodities will also be important.
Wednesday: Oil stocks data. The EIA release their weekly US stocks data for crude oil, gasoline & distillates. Crude oil inventories were higher than expected last week causing crude to crash immediately after the figures were released.
Thursday: Weekly Export Sales. The rise in the U.S. dollar does make U.S. grains less competitive on the world market, but sales tallies have not yet tailed off. In fact, in some cases, a rise in the dollar could spur some extra business as countries who have waited to buy push the button.
The week ahead in agriculture
(Ag Web) -- Weather watching.
Periodic rains and a lack of heat in the Corn Belt forecast so far have proved to be crop friendly in the view of markets. If weather forecasts don't shift this coming week, that will continue market thinking that things are okay in farm country and the corn and soybean crops are not shrinking.
Crop ratings.
If Monday's crop condition ratings show another increase for corn and soybeans, it will back up market thinking that weather is definitely helping crop prospects. After the gyrations in the spring wheat condition ratings, it will be interesting to see what USDA says on that front Monday.
Weekly Export Sales.
With China's new-crop soybean purchases nearly on their own putting the weekly sales totals ahead of trade expectations for the week ended July 17, traders will watch for a repeat performance in next Thursday's data.
End of the month.
Not only could weather affect markets next week, but the end of the month looms as another potential time for some extra market moves as traders reposition themselves for the month ahead. Outside markets will also still play a role in grain futures activity.
The week ahead in agriculture
Weather outlooks this week. The monthly long-range forecast updates come out Thursday next week, and that will provide a look at what the weather picture looks like as we head into key times in the corn and soybean growing seasons. The outlooks for August and August-October will be out Thursday morning.
Crop Progress updates. After the slight uptick in corn and soybean crop ratings this week, and weather that traders viewed as crop friendly, expectations will be for even more improvement in those condition marks when the data comes out Monday morning. The figures will reflect conditions as of July 13.
Hearings on markets. This week will continue the focus on efforts by lawmakers to put limits or change rules in trading of commodities. The Commodity Futures Trading Commission has been under fire for the situation, but maintain they need more staff to be able to adequately assess the situation.
CRP court date. There will be a hearing July 17 in U.S. District Court on the injunction granted that halted activity on Conservation Reserve Program (CRP) haying and grazing efforts. USDA will no doubt defend the effort strongly as it seeks to restore the effort they announced in May.
The week ahead in agriculture
Monday night sees the release of the latest crop condition ratings for corn, soybeans and spring wheat. The report will also detail winter wheat harvest progress.
Leaders of the Group of Eight (G8) countries meeting Tuesday through Thursday in Japan next week. While financial and economic issues will be on their agenda, a clear focus is expected on the world food price and supply situation. Many are calling for these key nations to do more to help the developing world cope with higher costs.
The monthly USDA Supply & Demand and Crop Production Reports will be released Friday morning, and that will be a late-week focus for markets. The production data will feature the first survey-based estimate of the U.S. total wheat crop for 2008. On the S&D side, traders will watch how the updated acreage figures from USDA will be blended into the balance sheets for corn, soybeans and wheat in particular.
There's a growing expectation that USDA will make an announcement after the July 11 S&D report on whether or not they'll allow Conservation Reserve Program (CRP) contract holders to exit those contracts early without penalty. The key to any announcement is if the penalty-free early out is allowed as many expect, how many acres will be offered that option to bring ground back into production for the 2009 growing season.
