Reading the inventory reports

Module 1 told you inventories are the shock absorber and the reports are scheduled volatility. This is the reading lesson: what the reports say, and the discipline of standing near them.

The fixtures

• EIA petroleum status: Wednesdays, 10:30 New York time. Crude and product stocks, to the barrel, with the Cushing figure - module 1's tank farm - broken out on its own line.
• EIA natural gas storage: Thursdays. The market's scoreboard for whether winter is arriving on schedule.
• USDA WASDE: monthly. Re-draws supply and demand for world agriculture; the grain markets' whole month can pivot on it.

The number is not the news

A build in crude stocks is not bearish. A build larger than consensus is. By release time, the expected number is already in the price - so the print only moves the market by the amount it surprises. This is the same expectation machinery as FX's calendar releases, with one upgrade: these numbers count physical stuff in real tanks, so a surprise is direct evidence about the balance, not a survey's opinion of it.

Watch one release before trading near any of them. The first minute is a spasm - algorithms parsing the headline - and the direction five minutes later is frequently not the direction five seconds after. That gap between first reaction and settled reading is where untrained accounts donate.

The discipline

The release times are published months ahead. Being surprised by one is a choice. The professional habit is unglamorous: know the fixtures for your product, know the consensus going in, and either have a position you would hold through the coin toss or be flat. Module 1 said it plainly and it bears repeating - an open position through an inventory report, without a reason sized for it, is risk you did not need.