One impact of the partial government shutdown is the lack of data from USDA, data that ultimately helps direct the futures markets. It appears likely the agency will not be issuing the important crop production reports this Friday and American Farm Bureau Federation Chief Economist Bob Young says that will disrupt commodity and futures markets. Those who work on the reports are furloughed right now.
“No question it’s going to disrupt the market from the information flow that it traditionally has, and because of that the market’s going to move through those few days and traders are going to go back and look at independent, or outside or private forecasts, etc, and those private forecasts are going to be what kind of drives the markets for a few days there.”
So Young says there will be no official number to point to on production, stocks, demand, price, yield and more. He adds not everyone will have access to key data.
“The downside is you’re going to have select folks having access to that data and the entire market is not going to have access to that data. The market is going to be able to assess that our over a period of a day or two and not a few hours, but you’re going to have folks that have access to that private data that are going to be able to I’m sure take advantage of that and trade on that information.”
Young says U.S. competitors who examine USDA reports closely will also turn to other data sources. But broker Logan Burgess with Grain Hedge says no government data makes for a quiet period right now.
“There isn’t a lot of game changing information coming out for the grains,” he told HAT. “With that said we expect wheat to show some relative strength compared to corn and soybeans with corn and soybeans to kind of grind lower after those September 1 reports until we can get some new information here in the market. At this moment it doesn’t look like we’ll be getting it on Friday.”
The lack of daily USDA data is already slowing down trade in the livestock markets, making it harder to reach cash settlements for lean hogs and feeder cattle. The CME Group says a prolonged shutdown could interrupt settlement price for certain livestock futures and options contracts starting with those this month.