Expert Q&A: What to Watch in the Market During the Government Shutdown

As we approach the one-month mark of the U.S. government shutdown and the looming end of Harvest season, farmers have high stocks and not a lot of market information to inform their marketing strategies. 

This week, Trader PhD’s Ag Consultant Nick Lawrence shared the rundown on what he’s watching to inform his consultations. 

The last couple of weeks you’ve discussed the government shutdown on Trader PhD’s CommodityChat podcast. Can you give us the highlights of what you’ve touched on?

Basically what we’ve discussed is that the longer this goes on, the more volatility will surround the “restart” of data. 

The market is still going to trade. Commercial companies still have their business to do and they are the ones that really drive the market. 

How is this shutdown similar or different to previous government shutdowns in terms of how the markets are reacting so far?

There really is no difference as far as I can tell. There are things going on outside of the shutdown that are creating plenty of price movements, including inflation, geopolitics and trade discussions. 

In the absence of USDA reports, what data is available for the market to react to?

There is still private data that is being circulated. Even foreign data that is still being looked at. 

A lot of this data is subscription based, i.e. Bloomberg, Reuters, etc. Trader PhD customers also receive information about private surveys via news articles on the Trader PhD App. 

Studying prices’ action is another way to gauge what the market expects. This is something we do here at Trader PhD. 

Why is it important farmers stay tuned into these sources when the government is shut down?

Watching data trends is the best way to keep your finger on the pulse of market expectations. It doesn’t mean they are always “right”, but at least you have an idea of what the market expects.

What can farmers do to prepare for when the government does reopen?

Make sure to take advantage of some risk management strategies.

We have had chances to get caught up on this summer’s time sales and also have had chances to retain some upside. Altogether, we’re reducing risk to our businesses. If all that was/is being done in proper production ratios, that's about all you can do until we know more. 

Thanks, Nick!

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Hi! We’re Trader PhD, an Ag Marketing service located in West Des Moines, Iowa. We give commodity market advice to grain and livestock producers across the U.S. and Canada. 

With over 30 years of experience serving farmers and ranchers, our team specializes in strategic hedging and speculating in the livestock and grain markets. We offer essential tools and market insights that help agricultural professionals make informed decisions, safeguard profitability, and manage commodity marketing efficiently.

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