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Missing market reports now could mean trouble later

Progressive Cattleman Editor Carrie Veselka Published on 18 January 2019

As the partial government shutdown completes its fourth week, the gaps left by many government agencies whose responsibilities are left unattended until further notice are starting to show. One of the most far-reaching concerns is the livestock market reports usually provided by the USDA Agricultural Marketing Service and the National Agricultural Statistics Service.

Several reports are currently not available, including World Agriculture Supply and Demand Estimates (WASDE), Quarterly Grain Stocks and weekly export sales. The Livestock Slaughter and Cattle on Feed report has now joined the ranks of missing reports, and if the shutdown goes into February, the semiannual Cattle report will be affected.

Brenda Boetel, professor and extension economist at the University of Wisconsin – River Falls, said in her report for the Livestock Marketing Information Center that the markets will continue to make assumptions about the content of these missing reports, but the longer we go without real data, the greater the gap between market estimates and reality may be when the reports resume, especially if the reports say something different than what the market assumed.

She said the cattle markets care about last week's missing reports, because they gave the final information on the size of the 2018 corn harvest, the speed in which corn is being used and the first hint of information regarding how many acres of each crop will be planted in 2019.

Boetel said that at this point, the market is trading on old information, a less than desirable situation.

Corn

Boetel said the WASDE report likely would have shown a decrease in 2018 corn yield. Poor harvest conditions affected acreage as well as yield. She said the USDA would likely have lowered 2018 corn production from 14.626 billion bushels to around 14.545 billion bushels, and that the February report will begin to adjust the demand side of the equation and examine more closely whether usage estimates for ethanol or exports needs to be adjusted. “As the year progresses, we will need information on acreage intentions to get a glimpse into long-term corn prices, but for now, expect corn price to continue to behave seasonally and increase until mid-April or early May.”

Cattle markets

Boetel said that last week’s market saw cattle futures come surging back, primarily due to technically driven trading, although optimism over the potential end of the trade war with China boosted some commodity prices. “The trade war isn't over,” she said, “but there is more light at the end of the tunnel.”

Market-ready cattle supplies are up from last year. Expect the year-over-year increase to decline as the quarter goes on. As packer margins decrease, slaughter schedules may also decrease in the near term. Expectations are for continued strong domestic demand as unemployment remains low; however, there is no new news regarding exports.

Weather outlook

A recent CattleFax weather update report stated that the partial shutdown of the government by President Donald Trump has also blocked access to current climate data, as well as historical data sets used in the analog forecast system. When the shutdown ends, a forecast for January-August 2019 will be prepared.  end mark

Carrie Veselka
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