Government Shutdown Could Hurt Grain Markets As Export Reporting Halts

December 14, 2018 02:46 PM
“We won't have any running barometer of the Chinese purchases,” he says. In today’s market, that lack of information could directly hit markets.

President Trump has been threatening to let the government shut down over his border wall. This week the world watched a heated exchange between the president and the Speaker of the House come January, Nancy Pelosi. According to Jim Wiesemeyer, ProFarmer policy analyst, if parts of USDA would shut down, the lack of export reporting could hurt grain markets.

“I don’t think Trump can back down on this,” Wiesemeyer told Clinton Griffiths on AgriTalk Friday. “We've got both parties digging in their heels.”

If a compromise cannot be reached, the government will shut down. A few USDA programs would continue to operate: weekly grain export inspections, federal meat, poultry and egg inspection, and mandatory livestock price reporting. FDA would continue vital activities in addition to Supplemental Nutrition Assistance Programs.

However, Wiesemeyer says USDA’s website would come down as would all USDA statistical reports, including daily and weekly export sales.

“We won't have any running barometer of the Chinese purchases,” he says. In today’s market, that lack of information could directly hit markets.

In addition, FSA offices would close. So, any payments from those offices would halt, including the possible second round of MFP payments under negotiation today by USDA Secretary Sonny Perdue and the White House Office of Management and Budget.

Last year, President Trump threatened to shut down the government over the border wall and did not follow through.

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Spell Check

Quincy, IL
12/15/2018 09:31 AM

  If China knows that their initial purchase of a large amount of soybeans will cause the market price to rise substantially, then I would make a small / token purchase (like they did this week) to drive the price down. Then I would try to ink huge purchases at these depressed prices before it becomes known that they are buying substantial amounts again. If the possibility that the government will shut down resulting in the cessation of daily and weekly export sales reports, then the Chinese buyers would have more time to acquire beans at the lower prices. In anticipation of a US government shutdown, the Chinese buyers might even postpone bean purchases a few weeks (that they would have made initially) until they can do so without the reports that inform us they are buying again. Here is my prediction ... if the gov does not look like it is going to shutdown there will be a very substantial, market moving, purchase next week. If it looks like there will be a shutdown, then I believe they will make those same substantial purchases only after the gov shuts down. The time frame that they would be able to buy at the lower prices would lengthen, and without the reports we would not know this until quite awhile after the fact.

Auburn, IN
12/16/2018 08:42 PM

  Well, you f---' demo rats voted to build the wall when muslin obummer was president, but what happened??? What's wrong now???? All you pricks want now is mass chaos , shut it down until you demo rats want to vote to build the wall, if you bast-- don't want to do that, nothing gets done,

Jonesboro, AR
12/14/2018 07:54 PM

  I don't think think few less government reports will hurt a thing. Reports are for traders and not for farmers. Another pointless column by the moron Laca!


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