No USDA reports, no trade certainty
Commodities analysts said Wednesday that it appears increasingly unlikely the USDA will release its monthly supply-and-demand report on its scheduled date of Oct. 11.
Most USDA employees who are responsible for collecting and aggregating the data used in the monthly report have been furloughed since Tuesday, after lawmakers failed to reach an agreement on a budget deal to avoid a partial federal shutdown. USDA spokespeople couldn't be reached to comment on whether the report would be delayed.
Every month, the USDA's World Agricultural Supply and Demand Estimates, known in the industry as "the WASDE," draws significant attention from traders and analysts. The October report holds particular interest because it comes while farmers are harvesting corn and soybean crops, providing the market with fresh insight on expected production and supply levels.
The prospect that the report--typically about 40 pages long--won't be released on schedule has created uncertainty in futures markets for corn, soybeans, wheat and other crops, analysts said.
If the shutdown isn't resolved and the report isn't released, growers, traders and companies that use grains and oilseeds to make everything from food to fuel to animal feed will be left unable to make informed investment and hedging choices, said Terry Reilly, a senior commodity analyst at Futures International LLC, a brokerage in Chicago.
The partial closure, combined with the expiration this week of a one-year extension to the 2008 Farm Bill, has left many farmers wondering how much of each crop to seed next year and to increased concerns about insurance rates, subsidy programs and the lack of government information. That means many won't use hedges, which cuts down on the amount of business done by grain brokers and commodity trading advisers.
"This is all a mess," Mr. Reilly said. "From producers to exporters to commercials, they are worried about the futures of their businesses."
Even if President Barack Obama and leaders in Congress reached a deal to end the shutdown in the next few days, commodities analysts said, it's unlikely enough time would be available for workers to gather and analyze the monthly crop estimates in time for the report to be released next week.
"If they're not out there surveying farmers, then it's hard to put out true assessment of yields," said Shawn McCambridge, a senior grains analyst at investment adviser Jefferies Bache Commodities LLC in Chicago. "This year is a little bit of an extreme because of the late season for corn and beans, which is keeping more uncertainty in the market."
If the government starts up later this week, it's possible the supply-and-demand report will still be released later. But the corn and soybean harvests are behind normal this year after wet weather in the spring delayed seeding and cold weather slowed crop development, which makes the timing of the government shutdown especially troubling for traders and analysts who monitor USDA data.