Key USDA statistical reports should be released “at a time of day when volume is heaviest and liquidity is deepest” and should be accompanied by both a one-page summary of relevant details and a one-hour pause in trading on major exchanges, NAWG and other grain groups told the Department in comments this week.
In a letter directed to USDA’s National Agricultural Statistics Service (NASS), the groups said these changes by USDA could help market participants who are managing physical risk and product deal with the increased volatility expected following the expansion of trading hours at the major U.S. grain exchanges in May.
The new hours prompted concern about the effects on farmers, grain and oilseed users and elevators of quick market reactions to new information contained in the USDA reports, which have historically been released to the public while markets are closed, in part to give market participants time to digest the new data.
While adjusting the timing of the reports’ release and providing a quick summary to help non-corporate traders would help small market participants, the groups also noted that USDA’s ability to mitigate the risks of new volatility is limited. For that reason, the groups also strongly recommended exchanges implement a one-hour pause of trading around report release times, which would provide a short period of time in which to analyze the data contained before trading resumes.
“We are deeply concerned that producers and smaller business operators without high-speed Internet access and/or sufficient personnel dedicated to immediate report downloads may be put at a significant disadvantage,” the groups wrote.
“Such data is relied on by our producer and agribusiness members to market their production and manage their risk, and a pause would allow them to adjust positions accordingly prior to potentially dramatic moves based on USDA-NASS reports.”
The group said the recommendations should be implemented for the World Agricultural Supply and Demand Estimates (WASDE) and reports on acreage, crop production, grain stocks and prospective plantings. Groups signing onto the letter included NAWG, American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, National Grain and Feed Association and North American Export Grain Association.
The letter is available in full online at www.wheatworld.org/othercorrespondence.