Hundreds of hedge fund managers, commodity merchants, government officials and farmers will have one thing on their mind when they turn on their computers on Friday: US grain statistics.
The release of this specialised report from the US Department of Agriculture has acquired huge market significance this year as the worst drought in half a century shrivels crops in America’s farm belt. It will influence trading for days and weeks to come as well as possible government decisions on biofuels and feed exports.
However, the drought will test the department’s Herculean data-collection efforts. The risk of sharp revisions as the growing season advances in the world’s biggest grain exporter raises the prospect of further volatility in food commodities markets, where corn prices have hit record highs of more than $8 a bushel.
Friday’s USDA crop production report will contain this season’s first national surveys of domestic corn and soyabean fields. Both crops have suffered the worst in the drought. “It’s clearly the most important report of the year thus far,” says Gary Blumenthal, chief executive of consultancy World Perspectives and a former USDA official.
Extreme heat and dryness have prevented many stalks from forming grain. Last month the USDA lowered its average corn yield estimate to 146 bushels per acre from 166 and cut the production estimate by nearly 2bn bushels, or 12 per cent.
The department’s July yield estimate was based on trends over the past two decades, adjusted for the drought. Friday’s report will be based on both a survey of farmers and visits to fields, in theory making it more accurate.