Fri Oct 9, 2020
October WASDE Preview and Market Update Recap
Yesterday we hosted our final webinar in our Grain Market Update Series. In this webinar, Barchart's Head of Strategy, Keith Petersen and Market Expert, Fernanda Harju of SCB Group, previewed the upcoming October WASDE report, discussed the latest cmdty Yield Forecasts, and hosted a live Q&A. If you weren’t able to attend, don’t worry, we’ll recap it for you now!
To kick things off, Fernanda wanted to go over a few things she thinks are hot in Ag right now. She said that it’s no secret that Brazil has been dominating the exports market in the last couple years, and that Brazil has continuously surpassing the U.S. in soybean production..probably once again this year. CME recently launched SCB’s FOB Santos Soybeans Futures and Fernanda pointed out that it really changes who has access to this market since traditionally only commercial companies who are trading the physical product had access. With the futures being listed right now, the counterparty risk is eliminated and speculators can now play it the market which previously, they could not. SCB is also involved in black sea corn and black sea wheat which started trading in 2017, as well as a new rice product which launches November 23rd on the CME. Fernanda then went into detail on the settlements of each contract and also explained her role in brokering these futures products.
Next, Keith took a deep dive into our cmdty Yield Forecasts for the October WASDE release. If you didn’t know already, cmdty recently added Crop Production Forecasts to our offering, so Keith touched on those as well for October. Our official September forecasts were released publicly on Tuesday October 6th and our yield forecasts are at 178.2 bu/ac for corn and 50.5 bu/ac for soybeans in the U.S. This represents a decrease in expected yield for corn, relative to the September WASDE report, which predicted end of season yield at 178.4 bu/ac. End of season yield for soybeans remains the same at 50.5 bu/ac. Since Tuesday, our yield forecasts have risen slightly across both corn and soybean with corn at 179.3 bu/ac and soybeans at 50.8 bu/ac. Our Production Forecasts are at 15,217M bu for corn and 4,215M bu for soybeans in the U.S, both risen slightly from the number released this past Tuesday.
Keith next pointed out that both Beans (blue below) and Corn (grey below) have rallied over 20% since August 10th. This suggests the potential for an upward revision in Corn production forecasts from the USDA, and a less substantial upside to Soybean production. A relative value spread (short corn/long beans) could make for market participants heading into the WASDE report.
Keith also informed the audience on a couple ways to access our yield forecast indexes. The first is through cmdty’s free U.S. Production and Yield Forecast Report which is published on the first and third Tuesday of every month and compares our previous yield estimates with our newly released figures. This report covers both the national and state levels with updates from major crop production areas.
Daily estimates are available within our commodity trading platform, cmdtyView Pro. Through cmdtyView Pro subscribers can access a geospatial representation of our crop production and yield forecast indexes as well as access to county and crop reporting district forecasts at no additional cost!
After an in-depth overview on how to access and use our yield forecasts Keith facilitated a great Q&A revolving around Fernanda's extensive background. We can’t fit everything they covered in one blog post, so be sure to check out the full webinar here.