USDA may increase corn and soy yield estimates and lower planted acres
In next week’s WASDE report
August WASDE report and market expectations
Corn Market: The USDA may increase its corn yield projection due to favorable growing conditions. Ethanol demand remains strong, potentially boosting overall demand
Soybean Market: Similar to corn, the USDA might raise soybean yield estimates. Export demand is slow, and acreage adjustments are possible
Wheat Market: Mixed expectations with potential increases in U.S. production and export sales. Russian wheat crop estimates may see minor adjustments
Historical Patterns: Corn and soybeans show a higher likelihood of positive report day closes, while wheat tends to have negative settlements on report days
Based on historical data from 1993 to 2021, our research at Grain Market Insider suggests that the volatility on the day of the August WASDE report can significantly vary across commodities
For corn, there’s a 59% chance of a positive close compared to a 41% chance of a negative one. On report days, the August WASDE report has typically shown a 2.13% gain on positive settlements, against an average loss of 3.42% on negative settlements
Soybeans, similar to corn, tend to lean towards a positive report day close, with a 59% likelihood of a positive close versus 41% negative. The percent change volatility at settlement for soybeans following the August report is in the middle to upper range of the WASDE reports, with an average 2.15% negative settlement versus an average 2.09% positive
In the case of wheat, the August report shows a tendency towards a negative settlement on the day of the report versus positive, with the percent net change volatility ranking towards the upper end. Fifty-nine percent of the August report days showed a negative settlement that was 2.08% lower on average, versus a positive close 41% of the time, with an average gain of 1.44%
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