WASHINGTON — When trading commodities, either physical, futures and/or options, access to data, analysis and market insight is critical, even if it may not significantly alter a trading position. For the grain processing and food industries, a highlight occurs annually in the second week of every January, when more data are released by the U.S. Department of Agriculture than on any week during the year. That didn’t happen this year.
The U.S.D.A. mostly has suspended reports issued by its National Agricultural Statistics Service, the Foreign Agricultural Service, the Farm Service Agency and others. Key U.S.D.A. reports scheduled for release on Jan. 11 included the annual Winter Wheat and Canola Seedings and Crop Production 2018 Summary; quarterly Grain Stocks; monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE); plus a bevy of World Markets and Trade reports. Added insight from subsequent reports included in monthly Outlook reports for feed, wheat, rice, oil crops, sugar and sweeteners and livestock, dairy and poultry also were missed. On a weekly basis, the key U.S.D.A. Export Sales report hasn’t been released since Dec. 20, 2018, for the week ended Dec. 13, 2018. On a more technical note, the Commodity Futures Trading Commission’s weekly Commitments of Traders report has been absent since mid-December.
While those in the trade view U.S.D.A. and other government data with varying levels of importance, one key aspect of the data is that everyone — large trading houses and individuals — has access to the same information at the same time. Without the government reports, it would appear larger traders may have an edge because most have in-house analysts and greater resources to gather other input. As the dearth of data drags on, companies know their own positions in the market but have less insight into the overall market.
By missing the weekly Export Sales report, grain exporters know what they have sold but not what has been sold overall. That has been especially critical during the ongoing trade war as new sales of soybeans to China resumed about the same time as the government went “dark” in December. Soybean futures initially traded higher on early reports of sales when talks between the United States and China resumed, but subsequently turned back lower amid the unknown status of sales as the talks concluded with positive indications but no agreement yet.
The U.S.D.A. has continued to release data on grains and oilseeds inspected and weighed for export. The weekly report (published each Monday) has taken on much greater significance as the only regular indication of U.S. export business, but it lacks the forward sales information of the Export Sales report.
For the other reports, the missing data leave a hole in supply and demand insight at the start of the new year as well as a lack of confirmation about winter wheat planted area and thus potential 2019 production. When last year’s reports were released on Jan. 12, reaction was greatest to the monthly WASDE report. Wheat futures, which had been trading higher all week, turned lower due to the WASDE’s bearish (higher) 2018 carryover forecast. Corn futures extended early week losses last year on higher-than-expected U.S.D.A. numbers for production, carryover and Dec. 1 stocks. Soybean futures, meanwhile, trimmed early week losses as U.S.D.A. production, carryover and Dec. 1 stocks all were below trade expectations.
The quarterly Grain Stocks report, which would have provided U.S.D.A. estimates of grain and soybeans stored on farms and off as of Dec. 1, 2018, is critical to provide insight into disappearance (use) during the preceding quarter, which allows the U.S.D.A. and private analysts to fine-tune their supply-and-demand forecasts.
The trade, based on surveys by Reuters and others, expected the U.S.D.A. on Jan. 11 to trim its estimated 2018 corn and soybean production numbers from the most recent estimates in November; raise its 2019 wheat carryover but lower corn and soybean carryover forecasts from December; raise its Dec. 1, 2018, wheat and soybean stocks estimates but lower its corn estimate from Dec. 1, 2017; and lower its winter wheat seedings estimate from 2018 acreage. What impact the actual U.S.D.A. numbers would have had on the trade is anyone’s guess.
The data in mid-January also are important for farmers who may be adjusting their planting intentions as the spring planting season approaches.