USDA released its World Agricultural Supply and Demands Estimates (WASDE) Thursday. The report was met with a collective eye-roll from the market. According to Darin Newsom, of Darin Newsom Analysis, the markets just don’t care about what USDA says anymore.
“It doesn’t matter [what USDA reported],” Newsom said to U.S. Farm Report Host Tyne Morgan. “We don’t know what planted acres are, so we have no idea what harvest acres are and no idea what yield is. We don’t know production or what demand is going to be. USDA predicted increased ending stocks based on unknown variables—why should we care?”
A look at the market’s reaction—or lack thereof—tells Newsom the funds truly have stopped listening to USDA’s reports.
“When these used to matter we probably would have been down but today the funds don’t care,” he says. “They watch for up-to-date information from private firms. Funds are looking at reality.”
He says USDA, farmers and traders just don’t know for sure what’s out there, but “there aren’t 91.7 million acres of corn like USDA claimed.” He advises farmers ignore USDA reports, too.
“Don’t pay attention to USDA,” Newsom says. “Don’t look at the weekly crop production reports, just look at the market. The market tells you everything you need to know, and then look at your crop fields and local basis.
“The market is telling us the corn isn’t there, I don’t care what USDA says. We had large ending stocks coming forward but it’s not going to be enough.”