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The Government Re-opens.....for now

Published on Monday, January 28, 2019

The longest running US Federal Government shutdown came to an end today.  Since December 22nd, government services have been largely idled.  Most of the USDA's workforce of roughly 95,000 was furloughed during the 36 days of the shutdown.  Consequently, some 62 reports and key data releases were withheld during that time.  Unfortunately, we may slip back into the very same situation after Valentine's Day as the current funding package has only extended government operations until February 15th, so as to buy time for the ongoing conversation about border security.

Since this all began, prices for grains have moderated and moved sideways inside an ever tightening range.  Dairy and cattle markets maintained more directional ranges (cattle up, milk down) though still very narrow.  See Charts.

However,  those quiet ranges may soon come to an end as the USDA prepares to unleash several reports over the course of the next two weeks.  Regarding grain markets, the Feb. 8 lockup will include release of the February World Agricultural Supply and Demand Estimate (WASDE), the January crop production reports, the annual crop production report, grain stocks, rice stocks, winter wheat and canola seedings and cotton ginnings.  In other words, no January WASDE will be officially released.  However, the release of this data allows the markets to catch up with current schedules for information release.

Export reports will resume their normal schedule with the first report due on Thursday of this week.  The Commitment of Traders report is also scheduled to be released on Friday and will update current positions together with the backlog of previous data.  The January Milk Production report (which was also not issued) will, like the WASDE, not be released.  Instead, the previously scheduled February report will take its place.  The wrinkle in this comes in the fact that it's release is due following the end of the current funding package.  It may be a while for such numbers to be released.

The main theme in all of this is that data is forthcoming.  However, since we are swallowing two months of information in one bite, tremendous volatility may await.  Producers are encouraged to contact us to sort out risk management strategies for this year's production in advance of any such releases.

Best Regards,
Mike North

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