NAPERVILLE, Illinois, Jan 10 (Reuters) - Friday’s data dump from the U.S. Department of Agriculture often sets the tone for grain and oilseed markets through the first part of the year, though the sheer volume of data can make it hard to decipher what truly moves the market on that day.

Whatever the catalyst for Chicago-traded soybeans, the outcome has been consistent as futures have risen on January report day for eight straight years. The trend on corn futures is more mixed, but it has been over a decade since the reports triggered a sell-off.

Part of the supportive streak for soybean futures has to do with the analyst biases for this month’s reports, as the U.S. stock and production data have not been surprisingly bearish in recent years.

In the last decade, U.S. soybean production in January has been higher than the trade guess just three times, and only one instance was significant (2019). Dec. 1 soybean stocks have come in above trade ideas in four of the last 10 years, but again, 2019 was the only significant instance.

Soybean futures drifted higher on report day in 2019, though it is a nuanced example. The January numbers were actually released in February 2019 due to a U.S. government shutdown, and the data blackout allowed the market to speculate on Chinese soybean purchases that may or may not have been happening.

But soy futures could potentially fend off bearish soybean data this year based on the extreme losses already incurred. Most-active soybeans are down 4.7% so far in 2024, the worst start to a year in 40 years.

U.S. corn and soybean production and U.S. quarterly stocks are typically the top focus in USDA’s January reports, but South America will be of interest this year. U.S. winter wheat seedings and routine updates to global grain and oilseed supply and demand will also pile on.

Traders will be watching Brazilian soybean estimates due to this season’s historic heat and dryness, with analysts expecting a 3% decline in production from last month. USDA in February 2019 had cut Brazil’s crop by 4% from two months earlier, which was expected.

The market could be sleeping on Argentina, though, as its soy crop is seen expanding by fewer than 1 million metric tons. Weather there has been supportive after last year’s catastrophic drought, but USDA’s bean yield estimate is still about 9% below the long-term trend.

On Wednesday, Brazilian agency Conab reduced its soy harvest by 3% and Argentina’s Rosario Exchange increased its bean crop by 4%. The Rosario Exchange also increased Argentina’s corn output by 5% to a record 59 million tons, though analysts see USDA’s Argentine corn figure on Friday drifting slightly lower from last month.

CORN

In the last decade, CBOT corn futures have finished January report day lower just three times, and the declines were fractional in all three cases. The last time corn reacted poorly to the numbers was in 2011, when futures tumbled 6%.

Most-active corn is down 2.5% on the year so far, more than in most years but less than a year ago. Like soybeans, corn has not had a recent history of wildly bearish outcomes on U.S. stocks and production in January.

The U.S. corn crop was larger than expected in three of the last 10 years, but only one instance, 2019, was significant. Dec. 1 corn stocks have come in above trade estimates in four of the last 10 years, though the margin was within 1%, whereas the trade’s over-estimations of corn stocks have been larger.

Of the four days per year that coincide with U.S. quarterly stock reports, the January one (for December stocks) has produced the lightest moves in CBOT corn and soybeans on average in recent years. March and June also feature critical acreage reports, and the June data comes in the thick of the U.S. weather market. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Reporting by Karen Braun Editing by Matthew Lewis)