For investors of agricultural commodities, there’s no single piece of information more important than the WASDE monthly report.
The USDA releases a report covering world agricultural supply and demand estimates known as WASDE, which is often a source of volatility in commodities markets.
As the premier agricultural report, investors should be familiar with the language and understand what kinds of details the report contains as it relates to agricultural commodities. As a globally traded asset, agricultural commodities are prone to regional specifics, like weather, which investors may not be aware of otherwise. In addition, the report contains global estimates for supply and demand giving investors a baseline for understanding price movements and agricultural commodity fundamentals.
Taking a Closer Look at the Report
The USDA’s monthly WASDE report covers a wide range of agricultural data covering everything from regional weather forecasts to global supply and demand for every agricultural commodity traded on the major exchanges. Crops are dependent upon a careful balance of rainfall, sunlight, pest control and soil composition in order to achieve the best possible environment for growing agricultural goods like wheat, corn, soybeans, coffee and more.
Agricultural commodities aren’t just grown in the U.S. – or in just one region of the world. For example, while the United States is the global leader of corn and soybean production and exportation, these crops can be found in many other countries as well. Wheat, on the other hand, is primarily found in Europe and Australia. Other crops like coffee and cocoa require very specific climates and can only be grown in certain warm, tropical regions. For investors, WASDE covers weather events and climate news for all of these areas.
Like any investment asset, understanding the fundamentals of supply and demand is critical to know whether it will go up or down in price. WASDE has a number of data tables on regional and global agricultural commodities giving investors insight on commodity trends and future expectations. Investors can quickly gather data related to specific agricultural commodities or see general trends in the sector. WASDE also includes a monthly statement for each commodity detailing recent events and future expectations.
Agricultural commodities are also heavily tied to global demographics. The current global population is around 7.4 billion people, while the amount of arable land has remained relatively consistent for decades. That means crop production must continue to improve efficiency in order to feed a growing population base. And events like drought and pest invasions can drastically alter the supply and demand of agricultural commodities very quickly causing a shortfall.
Want to know more about the major commodities traded on U.S. Exchanges? Click here.
Content continues below advertisement
Where to Find WASDE and What It Covers
Investors can find the current WASDE as well as past copies on the USDA website here. The USDA releases the report once a month with future publication dates listed online as well. It’s usually released between the 10th and the 12th of every month at noon Eastern Standard Time. Upcoming dates for WASDE include November 8th and December 11th to close out 2018.
Investors can find a plethora of information on agricultural commodities contained within the monthly WASDE report. A small copy of the latest October report for global grain and wheat supply is shown below as an example of what investors can expect to see:
Source: October 2018 WASDE courtesy of USDA.gov
WASDE details information regarding supply, demand, consumption and production for a number of agricultural commodities as well as recent price information on meat and dairy products. The reports are approved by the World Agricultural Outlook Board, which serves as one of the main sources of economic and commodity research and analysis. While the report is gathered for a U.S. audience, the data it contains has a global impact and is monitored by commodities exchanges around the world as well.
Learn more here about choosing the right commodity mutual fund.
The Bottom Line
Agricultural commodity investors should pay close attention to WASDE as a primary source of information when it comes to making estimates and predicting price movements. It’s a one-stop shop for weather reports and future predictions around the globe as well as supply and demand information, which is essential for commodity trading. Investors can find a wealth of information in the monthly WASDE report issued from the USDA website to help them stay apprised of the latest news and make accurate predictions about price movements to help them boost profits and reduce portfolio risk.
Don’t forget to check our News section to keep track of recent trends and market moving events.