How the USDA’s January WASDE Report Could Impact Grain Prices

As the USDA gets set to release its monthly World Ag Supply and Demand Estimates Report (WASDE) report Thursday afternoon, it could have an immediate impact on grain prices.

“This is probably the second closest watch to report of the year as far as WASDE’s go,” says Karl Setzer, Senior Commodity Risk Analyst with AgriVisor. “That’s because it will contain the final production numbers for the 21-22 marketing year. Corn and soybeans will be set after this, as far as yields go.

“We’re looking for a little bit higher yields and a little bit higher production,” says Setzer. “That may come as a surprise to some. It’ll depend how much the USDA raises any production, if they do,” says Setzer.

He says traders will be looking at how the USDA will adjust the demand for corn and soybeans.

Karl Setzer, Senior Commodity Risk Analyst with AgriVisor.

“We’ve had pretty good demand on soybeans, as far as sales go,” according to Setzer. The loading is not matching what we’re seeing on the sales side. USDA getting a little cautious there – I expect to see that trail off a little bit.

“Corn demand was reduced in December, so I wouldn’t be too surprised to see another shaving off of maybe 75 million bushels in this report, but yet we’ve got all year to adjust our demand yet,” says Setzer.

Setzer adds that he’ll be looking at the USDA’s estimates of corn and soybean production from South America.

“We’re going to see if the USDA is willing to cut the Argentine crops. We’ve seen several private analysts lower their projections. So far, the USDA has held pretty firm. We’re starting to see a divergence in Argentina up to 10 million metric tons between some of the private analysts and the USDA. If the USDA holds firm on their numbers, that could send a bearish shock through the market,” according to Setzer.

The USDA is set to release its monthly report at 12 p.m. Eastern time on Thursday, Jan. 12.

Click BELOW to hear C.J. Miller’s news report and interview with Karl Setzer, Senior Commodity Risk Analyst with AgriVisor, as he talks about how the USDA’s January WASDE report could have an impact on grain prices.