No WASDE Today Could Fuel November Market Surprise

Today, no news is the news. Due to the government shutdown, the USDA won’t release the October World Agricultural Supply and Demand Estimates (WASDE) report that was scheduled for this morning. 

This means the market won’t receive updated production data at a time when, according to one expert, traders are “fixated with yields.” 

“There’s still a chance we could get the October reports later this month, though USDA would have to restart field survey work, so that seems unlikely at this point,” said Brian Grete, a senior grain and livestock analyst with Commstock Investments. 

Experts say in 2013 and 2019, the USDA never released the WASDE reports that were impacted by government shutdowns. This begs the question, what will the lack of new data mean for the market? Analysts have weighed in. 

Karl Setzer, partner at Consus Ag Consulting, said the absence of a report today won’t significantly impact the market because traders are not expecting it. Naomi Blohm, senior market advisor with Total Farm Marketing, said grain prices traded “primarily in a sideways fashion” the past two times shutdowns interfered with the WASDE.

“The main impact in the near term should be to keep traders more cautious than normal,” said Ian Berry, lead editor of The Brock Report at Brock Associates. 

A November Surprise 

Looking ahead, Arlan Suderman, chief commodities economist at StoneX, and Al Kluis, managing director of Kluis Commodity Advisors, said a lack of new data in October could set the stage for a more volatile November. 

Suderman said in lieu of new USDA data, the market will depend more on private industry reports. “The risk is that the private sector misses something, which isn’t picked up until the November report,” he said. “That leaves the market susceptible to a bigger surprise than normal for the November report, which could create added volatility — in either direction.” 

Kluis said the trade expectation ranges he has seen for corn and soybean yields are narrow: 4 bushels per acre (bpa) for corn, and less than 2 bpa for soybeans. “This could really set up a surprise in the November report, because it wouldn’t take very much of a change to be below the low end of the trade estimates or above [the high end],” he said. 

However, Berry said the unanswered yield question comes down to a difference between “very good” and “great.” “The answer to that question does have an impact on the markets, but it is unlikely to be a major game changer for the balance sheet, particularly for corn,” he said.