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Senior Advisor

What Is "Positioning Ahead Of A Report"?

Wwe are used to seeing analysts, pundits, brokers, commentators, reporters, soothsayers, seers, wizards, fortune tellers, academics, gurus and even swamis talk about "positioning ahead of the report".

 

What does this phrase mean to us?  Is it a feeble excuse to explain otherwise small moves a little time before a report? 

 

If one is positioning, what does that tell us?  That the previous position is wrong and we need to change it because something bad might happen?

 

Does it mean the report has the potential to go against one's position, so it's better to get out?  Or even reverse a position?

 

Does it mean someone is taking some profits or booking some losses for some reason and expects to reenter the market after the report?

 

Do some traders think it is an opportunity to make a few cents wile the market is moving?

 

I don't really know if the phrase "positioning ahead of the report" has any intrinsic intelligent information in it or if it is just an empty phrase used to say something when there is nothing to be said.

 

All right, all you experts, soothsayers, witch doctors and genies, clarify all.

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14 Replies
Frequent Contributor

Re: What Is "Positioning Ahead Of A Report"?

Gobbledegook market speak filler that means nothing. jmo

Veteran Contributor

Re: What Is "Positioning Ahead Of A Report"?

" Positioning ahead of a report" simply means changing your existing position (whether long, short or neutral) so that your current positions are right sized in accordance with your expectations of the report.   On a daily basis people receive and interpret news, data in different ways though.  Makes for market efficiency.  

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Honored Advisor

Re: What Is "Positioning Ahead Of A Report"?

Yea these two kind of nailed it....

 

I think it is somewhat of a PR move to look "in the know" by advising firms, while actually stating the obvious.

Kind of a "sell if you are going to sell anyway" statement.

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Honored Advisor

Re: What Is "Positioning Ahead Of A Report"?

It seams to me like the more successful market advisory firms tend to walk the line very well.  The line between looking "in the know" and "keeping it fairly simple".

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Senior Advisor

Re: What Is "Positioning Ahead Of A Report"?

In this case, how is positioning ahead of a report any different than any other trading day?  So, why does it merit this tag line just because it happened within a few day sof the report?

I see your point, but it either makes the phrase meaningless or it means the trader is anticipating what other are doing and not just doing what he would do on his own.  So, right sizing to your expections would mean not your expections of the report but your expectations of how others will trade the report.

Honored Advisor

Re: What Is "Positioning Ahead Of A Report"?

All good information here.  But the position I usually think of in this instance is bending over..........Smiley Wink

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Veteran Advisor

Re: What Is "Positioning Ahead Of A Report"?

Traders look to minimize risk and that is exactly what I take from that statement.  Reducing the exposure of risk.  So if I a trader is  long 500 contracts, we know we cannot predict what is on that report with a 100% guarantee, so we reduce our position to 200 long. It is better to be wrong on 200 than 500 contracts.

Veteran Contributor

Re: What Is "Positioning Ahead Of A Report"?

@JimMeade...its different in the way that USDA reports amongst the masses are viewed in the same way earnings releases are for say APPL. That earnings release number makes all the difference in the world in terms of the valuation of the stock.  The same I feel for say, corn.   If I am an owner of APPL shares and whatever reason the consensus says that they didn't sell as many IPhones as the last quarter, or that analysts estimates are below expectations, or  you can add any number of inputs to come to a conclusion.  If I am a saavy investor I am either A) going to dump a few shares and stay long as it fits into my overall portfolio scheme (right sizing) B) Buy a Put to protect my downside on the shares I already own (harder than you may think)  C) or do nothing and say I am in it for the long term.  I think the same strategy for equities applies to commodities except you have to roll the futures at some point unless your just doing OTC business. 

 

Everything I have been reading points to a higher corn crop than anticipated...especially in CO.  

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Veteran Contributor

Re: What Is "Positioning Ahead Of A Report"?

Some information I yanked off a analyst report sitting on my desk......

 

2014/15 world corn production: 1,008 [981–1,034] million tons, 20 million tons above USDA
2014/15 world soybean production: 319 [299–325] million tons, 8 million tons above USDA
2014/15 world wheat production: 719 [710–729] million tons, 1 million ton below USDA
2014/15 world rapeseed production: 70 [69–72] million tons, 1 million ton below USDA

 

In its September Crop Production and Small Grains Annual Summary, USDA revised estimates for 2014/15
barley, cotton, oats, rice and wheat plantings. In general, the revisions appear consistent with the upper
bounds implied by FSA’s 1 September-reported acreages. A similar approach to corn and soybeans would
bring USDA’s corn and soybean plantings to 88.5 and 82.9 million acres in this Friday’s Crop Production.
Additional FSA acreage enrollments reported after 1 September could raise these estimates. Similarly, close
review of the FSA data could lead USDA to recognize the gross underreporting that appears to have
occurred through 1 September in Michigan, Nebraska, southeastern states, and (to a lesser extent) in Ohio
and Pennsylvania. In these scenarios, we would expect USDA to place corn and soybean plantings above
88.5 and 82.9 million acres, but still below its current estimates of 91.6 and 84.8 million acres. Likely
increases to corn yield and to the percent of plantings harvested for grain, coupled with the small increase in
2014/15 beginning stocks indicated by Grain Stocks, continue to imply that 2014/15 corn supply would
remain relatively unchanged at 14.3 billion bushels even if USDA lowers corn plantings to 88.5 million acres.
Should it understate corn production via underestimation of plantings, the error would eventually be offset
by anomalously high stocks during 2015.

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