What are USDA Crop Reports?
The Crop Progress reports are weekly reports, ran April through November. They contain the progress of planting, growing and harvesting and crop conditions of various crops during that growing time frame.

Why are USDA Crop Reports important?
Provide information for projecting crop yields. Gives explanation on crop development and conditions.

Where does the USDA get their information?
There is an estimated 4,000 reports every week, on every Sunday.  The report comes out Monday afternoon.  It would seem simple for farmers to volunteer their information to the government.  Some willing, some not so willing, therefore the information would not be consistent. 


What do these weekly reports impact?
The reports impact the CME markets and results in price fluctuations. Before the report is released, many private analysts share their own projections.  This leads to many perceptions before the report is out, and sometimes the market will respond before the report is released. July is a very important month.  This month is very important growing time for corn and soybeans.  The old wives tale, "knee high by the fourth of July" does not apply.  Corn plant is more advanced at this stage, and looking and silking and pollination stages.  Soybeans filling pods, so weather, temperature and precipitation is very important. If weather is a big issue, the market will react, either from fear of the unknown or the confidence that a good or bumper crop was going to be harvested.

Is their information consistent? 
Crop Progress reports follows the stages of progress and growth of crops.  The crop conditions could include the effect of crop quality and the different stage of developments as well.  

These numbers made the corn and bean market  decline when it was released midday. Corn came in at 89.2 million acres.  Corn acres look to be higher in the south and Texas.

Soybeans came in at 84.6 million acres.  This is a new record high for soybean acres, but still below most estimates. 

Corn Stocks came in 7.745 billion bushels, 136 million bushels higher than the average guess, and over 736 million bushels more than a year ago. Indiana, Iowa, and Illinois are the the state holding most of the corn, and that is not surprising since they sit right in the middle of the corn belt. April Supply and Demand Report might show more ending stocks, depending on the feed usage.

Bean Stocks came in at 1.333 billion bushels, 12 million bushels lower the the average guess, and 340 million bushels more than a year ago.  Indiana, Iowa, Illinois and Ohio still has the majority of bushels on hand.

Wheat usage and stocks had no surprises, no record highs or lows.

What does this report mean? In my opinion, we are looking at another big crop year.  We are far from it being harvested, and many factors can change the game at any time.  Traders will keep an eye out on the weather this spring, of course.  Planting in the south and Texas is currently being delayed with rains moving in, but they are not wide spread. They will also watch corn stocks closely, and the bushels being distributed. If farmers hold on to their bushels going into summer, they might see a very supportive basis level, but they might also see the basis level go the other way very quickly.  

USDA reports are not always easy to decipher.  But understand the timing of the report and how it might affect the grain markets is important for your operation and marketing plan.

 

This post is part 2 of a 3-part series sponsored by Indiana’s Family of Farmers.