Agriculture data threatened as US government enters shutdown

Key information and data services which the agriculture market relies on have been jeopardised after the US government entered shutdown Friday night.

Congress failed to find agreement on a compromise package that would have extended federal funding until next month, leaving the vast majority of federal activities suspended across all government departments.

Negotiations continued up to the midnight deadline, but with the crucial vote in needing to secure a 60-40 majority to pass, senators were deadlocked at 50 in favour to 49 against. 
 
The shutdown means key agriculture-focused departments will close down, hitting a slew of daily and weekly data releases from the USDA such as export sales inspections, price information, and other news or fundamental information that traders, analysts and farmers rely on.
 
Any lengthy shutdown may also affect monthly reports such as the World Agricultural Supply and Demand Estimates – a globally referenced snapshot of supply and demand across the grains and oilseeds space that often influences trading decisions and price movements for both exchange listed futures contracts and physical prices.
 
Other key data, such as the Energy Information Administration’s weekly ethanol production data, which gives market participants an idea of the volume of corn being taken into US ethanol production, will also be suspended.

It may also further delay finding a resolution to a tax break introduced with President Trump’s flagship tax reforms in December, which has given US farmers a substantial incentive to trade with cooperatives like CHS at the expense of agribusinesses such as Cargill or ADM. 

The taxcode changes caused embarrassment for some when the anomaly was revealed, kicking off frantic initiatives amongst lobby groups, senators and agribusiness to resolve it.

US-based market sources were cool on the impact and anticipating a swift resolution.

“I wouldn’t be totally shocked if they shut down for a day or two,” one market source said before the shutdown was confirmed, describing it as political posturing.

“We’ve been here before two or three years back, they’ll eventually compromise... if anything it means more bearish risk, but the impact should be minimal,” the market source said.

The USDA has also published advisory notices around its agricultural data services at www.usda.gov/shutdownplans.