UPDATE 3-U.S. cancels October crop report, first miss in 147 years
(Reuters) – The U.S. government canceled its monthly report on grain and cotton production on Thursday for the first time since reporting began in 1866 and said it will not estimate U.S. or world crop production until early November.
Cancellation of the October report means the first harvest-time estimate of U.S. crops will be Nov. 8. The production report and companion data on crops worldwide are the U.S. Agriculture Department’s premiere reports.
They attract a worldwide audience and frequently move commodity prices – and with the gap of an additional month, potentially more so than usual.
The widely followed USDA reports were the biggest immediate casualties of the 17-day government shutdown. Officials were also deciding on Thursday whether to issue an overdue report on the U.S. inflation rate.
“It’s a great shame. We lose the continuity of the series, the course correction that it provides,” said Bill Nelson, analyst with Doane Advisory Services in St. Louis.
With the cancellation, the November report will be USDA’s first harvest-time estimate of U.S. crops. By November, the corn and soybean harvests are usually in the final stretch and cotton is half harvested.
Users of corn and soybeans – from food companies to exporters – will be counting every bushel to determine if supplies recover after three years of declining production. As a result, markets have been highly sensitive to the USDA estimates.
“There is always the potential for a shock in each monthly report so I’d suggest there are twice the chances that we’ll get a shock this time, or that the shock will be twice what it ordinarily would be,” said a futures broker.
USDA’s previous crop estimate was issued on Sept 12. It also on Thursday canceled or postponed a range of reports because it could not gather data during the shutdown due to lack of funding.
GOOD TO BE BACK
Agriculture Secretary Tom Vilsack greeted employees as they returned to the USDA complex on the national Mall. “Good to have you back,” he said repeatedly, shaking hands with workers.
“We have never missed a report in the past,” said a USDA spokesman, who said the cancellation of the crop report was “the first time ever.”
USDA began crop reports in 1866, covering cotton and tobacco, a year after the end of the American Civil War.
The last time USDA delayed its premiere reports was September 2001, when they were held up for two days in the wake of the Sept. 11 terror attacks.
Besides the crop report and the companion World Agricultural Supply and Demand Estimates report, USDA said it canceled two weekly reports on crop conditions. It said a monthly Cattle on Feed report, due on Friday, would be postponed, along with a report on peanut prices.
“NASS is assessing its data collection plans and evaluating the timing of upcoming reports,” USDA said of its National Agricultural Statistics Service.
Officials also met to decide what to do about USDA’s weekly report of grain, soybean, cotton and meat exports, an important indicator of activity for the world’s largest agricultural exporter.
During the shutdown traders got export news in dribs and drabs – for example, Reuters reported overnight that China has bought close to 1.2 million tonnes of U.S. corn this month – but are anxious for a complete accounting.
“Some of the exports and the news we were hearing was more speculation and so we will actually be able to put some facts with it. The longer the government was gone, the more out of whack things got,” said Jason Britt, president of Central States Commodities.
For the November crop report, USDA will run its usual survey of more than 10,000 growers and send crop enumerators to check yields at hundreds of fields that were selected for monthly inspections. USDA’s crop estimates, issued around the 10th of each month, are based on conditions on the first of the month.
Its November forecasts have a margin of error of 2.1 percent for corn and 2.3 percent for soybeans. By comparison, the September report had an error margin of 8.5 percent for the corn crop and 9.6 percent for soybeans.
Market participants will have to wait a bit longer for the Commitments of Traders report from the Commodity Futures Trading Commission, typically due each Friday.
CFTC, the U.S. futures industry watchdog, said it will not have time to put this week’s report together. The report shows the holdings of various participants in U.S. futures markets and are used to infer potential price trends.
