This week marks the official start of the new crop supply and demand season with the release of the USDA’s outlook this Friday. There will be a lot of talk about the numbers ahead of the report, what traders are expecting and how it will be bearish. There will then be a lot of talk after the report on the nuances of the numbers and what they mean--when they actually mean very little outside of acting as a starting point for the year ahead.
Don’t get me wrong, I am not saying the USDA numbers are meaningless, that is not the case at all. However, in this instance, there are a couple important factors I feel farmers and analysts tend to miss. First, the market has been trading these numbers for months and secondly, the numbers we get on Friday are almost guaranteed to change, possibly in a major way in the year ahead.
