Crop report
Also written Crop reports
A government or research-agency publication giving acreage, planting progress, yield estimates and production levels for a crop — a key input to predicting agricultural commodity prices.
In plain language
Before a crop is even harvested, there is usually a fairly good idea of how much of it there will be. Government agencies and research bodies publish regular estimates.
Those estimates move prices well before the harvest actually arrives — a bigger crop than expected tends to push prices down, and a smaller one tends to push them up.
How it works
The workbook: "Crop reports provide detailed insights into acreage, planting progress, yield estimates, production levels, and inventory status of key crops... A higher-than-expected production report generally leads to price declines, while lower output projections can drive prices upward."
Crop reports are read alongside weather reports — rainfall, temperature, drought, flood and frost conditions, and longer patterns like El Niño and La Niña — because agricultural commodities are directly exposed to the weather in a way metals and energy are not. Together, the two feed traders' hedging and pricing decisions for commodities such as wheat, corn, soybeans, cotton and pulses.
A worked example
Illustrative. Ahead of the rabi harvest, a government crop report revises its wheat production estimate upward, from 105 million tonnes to 112 million tonnes, a 6.7% increase, following a good monsoon.
(112 − 105) ÷ 105 × 100 = 6.7% upward revision
Wheat futures on a domestic commodity exchange fall in anticipation of the larger supply, well before the actual grain reaches the mandis. A delayed monsoon cutting soybean output estimates by, say, 8% would be expected to push soybean futures higher instead — the opposite reaction to the opposite report.
Why NISM asks about it
Chapter 11.5 (Crop Reports and Weather Reports) sets out the direction of the price reaction. Expect a question testing whether higher- or lower-than-expected production leads to a price rise or fall, and one confirming this mechanism is specific to agricultural, not metal or energy, commodities.
Common exam traps
- Crop and weather reports apply specifically to agricultural commodities. Metals and energy respond to different drivers covered elsewhere in the same chapter — OPEC decisions, mining strikes, industrial demand — not to rainfall or acreage data.
Where this is taught
Free preparation for NISM Series XVRelated terms
- BrentThe benchmark crude oil price for oil produced in Europe and Africa, sourced from the North Sea and traded on ICE — one of the two global oil pricing benchmarks alongside WTI.
- Cost-push inflationA rise in the general price level caused by higher input costs to producers — wages, raw materials, energy — rather than by demand outrunning supply.
- NYMEXThe New York Mercantile Exchange, the global benchmark exchange for trading energy commodities — where WTI crude oil is priced and traded.
- Over-hedgingHedging a larger position than the actual underlying exposure calls for, which turns a risk-reducing strategy into an unintended speculative bet.
- Dollar indexA measure of the strength of the US dollar against six major currencies, used by commodity analysts as a single gauge of currency movement instead of tracking each one.
- Inventory dataThe quantity of a commodity held in storage at a given time — in warehouses, on exchanges or in government reserves — read as a direct signal of oversupply or scarcity.
- Export banA government prohibition on exporting a commodity, used to protect the domestic market, which tightens global supply and drives world prices higher.