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'We are in a fog' - ag investors' diary of US shutdown

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The shutdown of the US Department of Agriculture, and other parts of the government, thanks to the deadlock in political talks on the US budget has prompted a range of effects, from the suspension of CME group lean hog and feed cattle indexes to talk of investors quitting agricultural commodity markets.

Investors, through their own words, relate the unfolding impact of the US government crisis.

Friday October 4

"There was no weekly export sales data yesterday, there will be no Commitment of Traders report this afternoon and if shutdown continues we do not expect to see a crop progress report on Monday." Benson Quinn Commodities

"Trading volume is deteriorating and the trading ranges will likely become narrower as the government shutdown continues.

"Traders are now convinced the shutdown will continue into the debt ceiling deadline on October 17." Paul Georgy, Allendale

"Attendees at the USDA's annual Data Users Meeting in Chicago scheduled for October 21 are wondering whether to cancel travel plans as Wasde staff may stay in Washington to scramble together a delayed release crop report—or not?

"By law, monthly crop reports must be issued between the 8th and 14th." Richard Feltes, RJ O'Brien

Thursday October 3

"[The absence of] fundamental data has many traders moving to the sidelines.

If not necessarily leaving the market, the speculator is not adding to new positions with Thursday's volume down from Wednesday's." Kim Rugel, Benson Quinn Commodities

"I hear talk that a few traders may be liquidating positions amid perceived higher risk caused by cessation of government reports." Richard Feltes, RJ O'Brien

"Most of the time we don't like hear what the government has to say. But we are in a fog." Mike Mawdsley, Market 1

"[Government] data collectors are furloughed which is the issue. The law does require Wasde to release a report monthly between 9th and 12th of the month." US Commodities

"Maybe we should all dust off those technical analysis books on the shelves. Or perhaps toss those ancient ones and get some more modern editions.

We may need some help if fundamental data are not available for an extended period of time." Paragon Economics, Steiner Consulting

"The issues with the US government has weakened the US dollar index substantially. This always prompts some buying [in dollar-denominated commodities]." Darrell Holaday, Country Futures

Wednesday October 2

"The US government shutdown had little discernible impact on the agricultural complex for the session. However, only time will tell if this changes.

One impact is the government shutdown means the USDA market reports will be suspended. This means the key October Wasde report may not be released on time." Luke Mathews, Commonwealth Bank of Australia

"Please note that calculation and distribution of the CME lean hog and feeder cattle indexes has been temporarily suspended due to the unavailability of relevant data reported by the USDA." CME Group

"One bullet was dodged today when it was announced that 10 Federal Milk Marketing Order prices would be released tomorrow.

Those prices will allow the final settlements of September CME milk, cheese, butter, whey and nonfat dry milk futures and options as scheduled." Paragon Economics, Steiner Consulting

"The ICE Futures US board of directors has taken emergency action with regard to the October 2013 [cotton] futures contract.

Today's action by the Board provides a method for calculating exchange premiums and discounts in the event that the USDA data remains or once again becomes unavailable." ICE Futures US

"We can say that Wasde has a great team and once funding restored--they will pull out all the stops to push out the report." Richard Feltes, RJ O'Brien

Tuesday October 1

"Due to the lapse in federal government funding, this website is not available." US Department of Agriculture

"The government's on shutdown. It is not an issue today, but if it continues for 2-3 days the October Wasde crop report could be delayed." US Commodities

"A prolonged shutdown of the federal government and furloughing of USDA staff could result in interruptions or gaps in reporting key agricultural pricing information from the USDA's Agricultural Marketing Service.

"As a result, we wanted you to be aware that settlement prices for certain CME dairy and livestock contracts, which are cash settled based on USDA data, could be impacted in the event of a prolonged shutdown of the agency." CME Group

"As it stands, there will be no publication of livestock slaughter or prices beginning Tuesday, October 1.

The situation will not become critical until October 15 when the October lean hogs contract is due to expire." Paragon Economics, Steiner Consulting

Monday September 30

"Pending government shutdown impact on outside markets characterised as "cautious but no panic" with a rebound likely after opposing [political] sides strike a compromise." Richard Feltes, RJ O'Brien


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