Upcoming USDA Reports May Cause Market Volatility — Are You Ready?

What Happened

The release of the USDA World Agriculture Supply and Demand Estimate (WASDE) report on March 11 was “much ado about nothing.” There were little changes made to U.S. expectations and only slight changes to world expectations. It appears the USDA kicked the can down the road, waiting for more crop progress information from the Southern Hemisphere before changing production estimates. Potentially, the quarterly Grain Stocks and Prospective Plantings reports — both released on March 31 — will be more impactful and provide the next direction for grain markets.

Why This Is Important

Last month at the annual Agricultural Outlook Forum, the USDA provided estimates for acreage in the year ahead. However, these were not survey-based numbers. This month’s acreage report will be primarily based on farmer surveys and likely be a better view as to what farmers intend to plant for 2025. Informal surveys and conversations with producers and seed dealers suggest an increase in corn acres and a reduction for soybeans. Corn could gain as much as 3– 4 million acres, which would be in line with the 3-million-acre increase the USDA penciled in at its annual conference. It is likely that at least 2 million additional corn acres will come from soybeans.

Perhaps just as important as the acreage estimates is the release of the quarterly Grain Stocks report, which provides a more defined view of estimated inventory on hand. The dry weather that occurred this past August had an impact on soybean yield as well as corn dry-down time, which also likely impacted yield. Reductions in yield for both corn and soybeans in the November and January WASDE reports suggest there could be large variability in expectations for quarterly stocks. Stronger-than-anticipated corn basis levels in parts of the Midwest may also be an indicator that inventory numbers could be tighter than expected, confirming thoughts by some who believe the January corn yield estimate, at a record 179.3 bushels per acre, may still be too high.

What Can You Do?

Trying to outguess the results of a report, and perhaps more importantly the reaction to the report, is challenging. The odds are not in your favor that you’ll get it right.

A report considered friendly for prices could experience a negative price reaction, just as a negative report could be viewed as a reason for some to buy. Prior to the report’s release, be prepared for the market to move in any direction. Concentrate your efforts on strategy and preparation. Manage what you can manage. The March 31 reports are historically important and can be market-movers.

Find What Works for You

Work with a professional to find the strategy or strategies that are best suited for your operation. Communication is important. Ask critical questions and garner a full comprehension of consequences and potential rewards before executing. The idea is to make good decisions for the operation and rather than emotionally charged responses to market moves, which are always dynamic.

Editor’s Note: If you have any questions on this Perspective, feel free to contact Bryan Doherty at Total Farm Marketing: (800) 334-9779.

Disclaimer: The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy, or discipline will guarantee success or profits. Any decisions you may make to buy, sell, or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation.

About the Author: With the wisdom of 30 years at Total Farm Marketing and a following across the Grain Belt, Bryan Doherty is deeply passionate about his clients, their success, and long-term, fruitful relationships. As a senior market advisor and vice president of brokerage solutions, Doherty lives and breathes farm marketing. He has an in-depth understanding of the tools and markets, listens, and communicates with intent and clarity to ensure clients are comfortable with the decisions.