For the first time in 40 years, farmers, exporters, processors and traders will have to live without a key monthly crop report that they rely on to forecast market direction because of the U.S. government shutdown.
The U.S. Department of Agriculture report that was due to be released on Friday covers everything from the size of the U.S. corn harvest to China's soybean imports.
"It's like flying an airplane and all of a sudden the flight control goes down," said Dennis Collins, a director with Trilateral Inc in Chicago. "People are flying blindly and don't have any updated data to figure out where they are or where they should be relative to true market value."
USDA's reports are often criticized by traders and analysts when the data defies expectations, but are still viewed worldwide as the gold standard for crop forecasts. Analysts and traders use the monthly figures as guideposts in formulating market outlooks.
"Everybody is guessing more. Less information is not good for the market," said Gary Blumenthal, president of World Perspectives Inc based in Washington, D.C. "For those of us who make our living by analyzing and second-guessing these reports, it's probably more traumatic."
"If you are one of the ABCDs, you have to figure your internal data is pretty good," said Blumenthal, referring to the big commercial grain firms - Archer Daniels Midland Co, Bunge Ltd, Cargill Inc and Louis Dreyfus Corp - which have their own private information on export activity, crop size and farmer selling.
The USDA's October crop report is the latest and biggest item in a series of agricultural data products that were suspended on Oct. 1 when President Barack Obama and congressional Republicans failed to end a standoff that forced the first government shutdown in 17 years and left hundreds of thousands of federal employees out of work.
To compile its monthly report, USDA starts at the farm level. Its staffers take two full weeks to survey growers and inspect crops in thousands of fields.
It is unknown whether the government will even issue its October crop report at this point, or roll the data into its November edition. The reports are normally released around the 10th of the month.
"Once we get past this next report date, then we start making assumptions based on assumptions, and that is where things get really rough," said Bill Gentry of Risk Management Commodities in Lafayette, Indiana.
"The speculative interest or the peripheral participants are stepping back, saying, 'I do not know, so I do not need to be here.'"
With that, Chicago Board of Trade futures markets have seen market volatility slip despite steady trading volume, which traders attribute to big grain companies and country elevators hedging the harvest of a bumper U.S. crop.
One measure of market activity, or volatility, is average true range which measures the daily high-low price of a commodity. Average true range volatility, developed specifically to track commodities, shows CBOT December corn futures volatility now at its lowest level since late March.
The lack of USDA data "probably has subdued trade somewhat," said Dan Cekander, director of grain market analysis for Newedge USA in Chicago.
However, he added, trading volume has been relatively steady, bolstered by the annual U.S. corn and soybean harvests that trigger hedge-related selling by farmers, commercial grain handlers, end-users and speculators.
Typically, market volatility peaks on the days when USDA releases its monthly and quarterly crop reports. The releases are often accompanied by limit price moves in CBOT grain futures as traders and analysts reset their working balance sheets against the milestones supplied by USDA.
The longer the trade goes without official government numbers, the greater the risk of the market drifting off course.
"Once USDA is up and going and they open the flood gates with data - what's that going to do to the markets?" said Collins of Trilateral. "If it comes out as expected then it won't be a problem. If not, it could be chaotic for awhile."