Since U.S. drought problems were obvious by late June, USDA took a somewhat unusual step in July by lowering its estimate ahead of the annual series of objective measurements that began in August. Each of these monthly production estimates is the result of an entirely new survey. In essence, each new report is the result of new data collection. There are two components to the estimates: farmer surveys and objective fi eld measurements. For grower surveys, some farmers known to be growing a particular crop from the June acreage survey are asked for their projected production. The objective portion selects certain fi elds and counts, then weighs and observes what’s happening in the fi eld. Input from these two methods is combined into the offi cial estimate. Any error in the fi nal production number is absorbed into use categories when stocks are measured quarterly. Watching Demand On the demand side, weekly USDA Foreign Agricultural Service reports show what was sold and shipped by U.S. exporters. Combining what’s already been shipped along with outstanding sales gives a picture of total commitments for the marketing year. For corn, weekly ethanol production and stocks numbers from the U.S. Department of Energy have become important since they began weekly reporting in 2010. Offi cial fi nal ethanol production numbers are still reported monthly, but with a two-month lag, they are less useful for immediate market direction. Soybean use has become less visible since the U.S. Census Bureau ended reporting monthly crush amounts due to budget constraints in July 2011. While the World Agricultural Outlook Board still estimates a crush total for the entire marketing year in its monthly supply-and-demand reports, a separate offi cial crush total is no longer available on a monthly or quarterly basis. Most private analysts, including Country Hedging, still maintain a separate monthly estimate of the crush based on the private National Oilseed Processors Association report of member activity. Offi cially, the closest look at the crush is shown on a quarterly basis combined with seed and residual use. Quarterly grain stocks reports show how many bushels are in storage at a given time and provide an important gauge of use that’s not directly measured, such as feed use. For this reason, the report often has a major effect on the market because it reveals usage patterns for categories that otherwise have limited visibility. Many of these important reports are released on the same days, which can enhance volatility. For example, in early January the quarterly stocks report, fi nal U.S. row-crop production report, new winter wheat acreage report and latest monthly supply-and-demand estimates — which include the latest world production estimates — are all issued at the same time. For better or worse, this market-moving ability is a testament to the long history, transparency and resources of the 150-year-old USDA. Key Reports and When Issued • Crop Production (nass. usda.gov): August through December surveys with new row-crop production estimates are issued about the 10th of each month, with the exception of the fi nal survey, which is issued in January. • World Agricultural Supply and Demand Estimates (usda.gov/oce): Monthly supply-and-demand reports are prepared by representatives from several USDA agencies. • Export Sales (fas.usda. gov): Summary of weekly U.S. export sales activity for multiple agricultural products. • Ethanol Production and Stocks (eia.gov): Ethanol production and stocks are included in the Weekly Petroleum Status Report from the U.S. Energy Information Administration of the U.S. Department of Energy. Offi cial monthly production is reported with a two-month lag. • Soybean Crush Statistics (nopa.org): Member crush and product statistics are reported monthly by the National Oilseed Processors Association. • Grain Stocks (nass. usda.gov): The offi cial measurement of grain stocks four times a year has two components: enumeration of commercial stocks and a survey-based estimate of on-farm stocks. •• LEARN MORE •• Get market news on Twitter by following @ hedgeit. Your CHS Connection 21