Oct 23 (Reuters) – Thursday is the day of reckoning for grain markets. That is when the U.S. Agriculture Department releases the next wave of export sales data that will either confirm or dispel rumors of heavy buying by China and others big importers during the government shutdown.
The USDA suspended hundreds of market reports during the 16-day shutdown that began on Oct. 1, including weekly export sales reports and daily reporting of large export sales.
Investors and traders instead relied on anecdotal reports of sales and piecemeal private confirmations which offered an incomplete picture of the often opaque international grains trade during the USDA blackout.
Read Also
U.S. grains: Soybean futures set two-week high on US weather worry, soyoil rally
Chicago Board of Trade soybean futures touched a two-week high on Friday on worries that heat may threaten U.S. crops and expectations that the country’s biofuel policy would boost demand for soyoil, analysts said.
“There was chatter about sales being made during the government shutdown, but we couldn’t confirm anything because the USDA wasn’t there to back it up. And the commercials are never shouting from the rooftops on what they do,” said Shawn McCambridge, analyst with Jefferies Bache.
The USDA released the first of several delayed weekly export sales reports late last week and will issue a second, for the week ended Oct. 3, on Thursday at 8:30 a.m. CDT (1230 GMT).
The remaining data, which will cover the period from Oct. 4-24, will be combined in a single report early on Oct. 31.
Both reports will be released while the Chicago Board of Trade futures market is closed, allowing market participants an hour to digest the data before trading resumes.
The final release, which will bring the backlogged data up to date, could unnerve markets because it covers a longer period of time than the normal single-week release and no government data was available for two of those three weeks, analysts say.
Since the government shutdown ended on Oct. 17, the USDA has confirmed a total of 717,000 tonnes of U.S. soybean sales via its daily reporting system. By law, exporters must report sales of more than 100,000 tonnes of a commodity to the same destination in a single day.
“We all heard talk that China bought 2 or 3 million tonnes of soybeans over the closure so unless those numbers are way off, like China bought 4 million tonnes, we should be OK,” said Jack Scoville, analyst with The Price Futures Group.
“The report next week will probably provide some pretty big numbers so we could get a good bump out of it, but then we might just go back to harvest pressure,” he said.
Benchmark CBOT soybean futures closed at $13.10 per bushel on Wednesday, corn settled at $4.42-3/4 a bushel and CBOT wheat ended at $7.01-3/4 a bushel.
All three commodities posted gains of less than 1 percent during the government closure.
Traders and analysts on average believe that soybean export sales were near 3 million tonnes during the shutdown while corn sales were more than 2 million tonnes as prices of both commodities hit multi-month lows. Wheat sales were estimated to be upward of 1.5 million tonnes.
Wheat prices climbed during the government closure, raising doubts about new demand following a strong export sales in the first quarter of its marketing year.
“The bar for wheat is set high and we’ve run the market up during this government shutdown quite significantly. We’re going to have to have the data to prove that the current prices are justified,” McCambridge said.
“Until we get current on this data, there will be some degree of uncertainty in the market.” (Editing by Leslie Gevirtz)
