The United States Senate is expected to vote this Thursday on President Trump’s border security proposal. The chamber’s decision could bring the longest government shutdown on record to an end. However, the possibility is slim.
The government shutdown has striped farmers and ranchers of important resources, such as U.S. Department of Agriculture (USDA) agencies. Producers will receive full access to Farm Service Agencies (FSA) starting Thursday, January 24. However, many will still be left longing for crucial government data, such as the January World Agricultural Supply and Demand (WASDE) report.
A commodity broker for John Stewart and Associates’ farm division says, “Producers are at a standstill, or holding pattern, until we can get the government opened back up and the Trump and Xi Administrations come to an agreement.” Jim McCormick, like many agricultural producers, would like to see the government shut down come to a close sooner rather than later.
?The shutdown has pretty much shut down the USDA, which means we?re a couple weeks behind the critical January crop report,? McCormick said. ?This report gives us final production numbers of the year (2018). Right now, the guess is the crop is going to be a little bit smaller. If the crop does get smaller, that may give the market the push higher that traders and farmers are looking at to hedge into.?
Grain markets currently lack major news and continue to trade a tight range. McCormick hopes to see a quick end to the shut down, so farmers can receive data necessary to make production decisions.
?There?s a certain set of producers locked in, but there?s a lot of producers in a state of flux. Tillage didn?t get done because of the wet fall we had. It put it back to this spring. Since that happened, the bean market has rallied a little bit. There?s a lot of producers in a state of flux, trying to find out what this market may do once we get this report form the USDA, as well as trade negotiations with China,? McCormick said.
American and Chinese officials plan to meet later this month, in hopes of reaching an agreement before the March 1 deadline. McCormick remains optimistic about trade negotiations, citing positive news coming from China.
?They offered to buy up to a trillion-dollars (worth) of U.S. goods over the next six years, in an attempt to draw the trade deficit to zero,? McCormick said. ?When they buy that kind of volume, they?re not just going to buy beans. They?re going to have to buy a lot of agricultural products, which could be very bullish. They?re talking for a 3 to 5 million metric ton corn purchase right from the get-go. If you buy 3 million metric tonnes of corn, you?re talking about 100 million bushels of corn demand that (neither) the USDA nor traders have penciled in.?
