Market Matters Blog
Katie Micik DTN Markets Editor

Wednesday 09/19/12

USDA Changes Release Time for 2013

For the past few months, I've nicknamed the expanded trading hour saga "The News Story That Never Ends." And today, USDA announced it's moving the time of its major statistical reports from the current 7:30 a.m. CDT to 11 a.m. CDT. The change doesn't go into effect until January 2013. The change only affects the grain reports. Livestock reports will still be released at 3:00 p.m.

I waded through a portion of the 100 or so public comments that were submitted to USDA, and this move makes sense given a lot of the concerns expressed by farmers, grain companies and speculators.

The word is liquidity. CME expanded its pit trade hours, including the options market, on report mornings shortly after the new hours were implemented. Options give the market liquidity, and CME's expansion of pit hours assuaged some concerns about market gridlock if only the electronic markets were trading through the report release.

"USDA considered all comments and thanks everyone for their thoughtful suggestions," said USDA Chief Economist Joseph W. Glauber. "The shift to a noon release allows for the greatest liquidity in the markets, provides the greatest access to the reports during working hours in the United States, and continues equal access to data among all parties."

DTN Senior Analyst Darin Newsom said the time change shouldn't make a huge difference in the markets, "except traders will be more rested when numbers are released. Most of the volume seems to occur during the first and last half-hour, so this will give traders something to do over the course of the day. Reports in general have been largely swallowed up by the "wider river" (expanded hours, expanded daily limits), so a noon (ET) release isn't expected to make that much more of a splash."

One trader on the sidelines of the Soy and Grain Trade Summit that's wrapping up in New Orleans said the time change would make for a messy day. Essentially, everyone will be twiddling their thumbs before the release, and all of the day's trading will need to take place in the afternoon.

The "wider river" theory is that an open market during report releases is like expanding a river channel so it's less likely to flood. In the past few months of "live" releases, there hasn't been a single day where the grain complex locked at the limit. Volume has slowed in the few days ahead of the report, and for the most part, the numbers are chewed up quickly and attention has switched elsewhere.

USDA statistical reports affected are: World Agricultural Supply and Demand Estimates, Acreage, Crop Production, Grain Stocks, Prospective Plantings, and Small Grains Summary. The time for livestock reports currently released at 3:00 p.m. will not change.

Posted at 2:59PM CDT 09/19/12 by Katie Micik
Comments (1)
Do people still rely on USDA reports. It seems they are old news before they are given.
Posted by Frank Thomas at 5:45PM CDT 09/19/12
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