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Factbox-US government shutdown: agriculture data hit

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Factbox-US government shutdown: agriculture data hit
© Reuters. FILE PHOTO: A general view of the U.S. Capitol, where Congress will return Tuesday to deal with a series of spending bills before funding runs out and triggers a partial U.S. government shutdown, in Washington, U.S. September 25, 2023. REUTERS/Jonathan E

CHICAGO (Reuters) – The release of commodity market-sensitive reports released by the U.S. Department of Agriculture (USDA) and other government agencies will be suspended if Congress fails to provide the government with funding for the fiscal year starting Sunday.

During shutdowns, nonessential government employees are typically furloughed, or placed on temporary unpaid leave. Workers deemed essential, including those dealing with public safety, food safety, and national security, keep working.

Private exchange operators such as the CME Group (NASDAQ:) are generally not affected. But routine government reports have in the past been delayed until the government reopens.

“Market reporters will pause USDA’s market news reports that help farmers, ranchers, commodity traders, and buyers determine the market value of goods, creating uncertainty in the marketplace with detrimental ripple effects for farmers who need to sell their products,” a USDA spokesperson said.

Below is a schedule of key reports planned for release in October and how they may be affected, depending on how long a shutdown lasts.

Monday, Oct. 2:

Weekly U.S. grain export inspections data, released by USDA’s Agricultural Marketing Service each Monday at 11 a.m. ET (1500 GMT), will not be published, according to the USDA spokesperson. Inspections reports were released during the 2019 shutdown as some personnel continued to work.

Monthly reports on U.S. grain crushings and fats and oils, including U.S. soy crushings, released by USDA’s National Agricultural Statistics Service (NASS) on the first business day of each month at 3 p.m. ET (1900 GMT), would also be suspended.

A weekly U.S. crop progress report, released by USDA’s NASS each Monday at 4 p.m. ET (2000 GMT), would be suspended, according to the USDA spokesperson. Farmers and traders rely on the report for harvest progress and crop condition data.

Wednesday, Oct. 4:

The U.S. Energy Information Administration said on Friday that a government shutdown would not have any immediate impact on the release schedule for its weekly oil inventory data, which includes figures on production and stocks of corn-based ethanol. The EIA releases its report each Wednesday at 10:30 a.m. ET/1430 GMT.

Thursday, Oct. 5:

Weekly U.S. export sales data, released by USDA’s Foreign Agricultural Service each Thursday at 8:30 a.m. ET (1230 GMT), would be suspended. Multiple weeks of export sales data delayed by two previous government shutdowns were later released in single, combined reports once the government reopened.

USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor told reporters on Thursday the export sales report “is not produced while the government is shut down.” Taylor said the report “is a critical tool for market intelligence for our exporters and for our industry in the United States.”

Friday, Oct. 6:

The U.S. Commodity Futures Trading Commission’s weekly Commitments of Traders reports, which detail the size of positions in options and futures, will not be published if there is a shutdown, a CFTC spokesperson said. When the reports were disrupted during the last shutdown, CFTC backfilled the data over a period of weeks after the government reopened. Released each Friday at 3:30 p.m. ET (1930 GMT).

Thursday, Oct. 12:

The monthly World Agricultural Supply and Demand report, set for release by USDA’s World Agricultural Outlook Board at noon ET (1600 GMT), would be suspended, according to a spokesperson for USDA’s Office of the Chief Economist. Farmers and traders are counting on the monthly report for an update on the size of the U.S. soy and corn harvests and how much the crops have been affected by late-summer dry weather.

Monthly crop production data, released each month by USDA’s NASS at noon ET(1600 GMT), would be suspended.

Friday, Oct. 20:

Monthly cattle on feed report, released by USDA’s NASS at 3 p.m. ET (2000 GMT), would be suspended, according to a USDA spokesperson. The report gives livestock traders and ranchers an estimate of the number of cattle in feedlots at a time when the U.S. herd is shrinking.

Wednesday, Oct. 25:

Monthly cold storage report, released by USDA’s NASS at 3 p.m. ET (2000 GMT), would be suspended, according to a USDA spokesperson. The report details supplies of everything from frozen meats to orange juice in storage.

Commodities

Oil set for weekly gain on signs of improving demand

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By Shariq Khan

NEW YORK (Reuters) – Oil prices rose in Asian trading hours on Friday, with global benchmark Brent set for its first weekly increase in three weeks on signs of improving global demand and slowing inflation in top oil consumer the United States.

prices rose 21 cents, or 0.3%, to $83.48 a barrel by 0018 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 18 cents, or 0.2%, to $79.41 a barrel.

Brent futures are set to rise about 1% on a weekly basis, and WTI futures are set to gain 1.4%.

Recent declines in oil and refined products inventories at major global trading hubs have created optimism over oil demand growth, reversing a trend of rising stockpiles that had weighed heavily on prices in prior weeks. Through Thursday, Brent crude futures were down around 10% from this year’s peak of $92.18 a barrel on April 12.

U.S. oil and fuel inventories fell last week, while Singapore’s middle distillate fuel stocks dropped to a near three-month low this week. In Europe’s Amsterdam-Rotterdam-Antwerp trading hub, gasoline stocks were down 7.5% in the week to Thursday, data from consultancy Insights Global showed.

Recent economic indicators from the United States have fed into the optimism over global demand. U.S. consumer prices rose less than expected in April, data showed on Wednesday, boosting expectations of lower interest rates in the country.

Those expectations were further bolstered by data on Thursday that showed a stabilizing U.S. job market.

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Lower interest rates could help soften the U.S. dollar, which would make oil cheaper for investors holding other currencies and drive demand.

“Financial markets now have placed the most bets on a September interest rate cut by the Federal Reserve, which would continue to temper the dollar strength and shift that strength over to commodities and equities,” StoneX oil analyst Alex Hodes said on Thursday.

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Commodities

Goldman Sachs discusses what’s next for natural gas prices

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Over the past three weeks, US prices have surged 30% to above $2.50 per million British thermal units (mm/BTU), fueled by production declines and increased feedgas demand for liquified natural gas (LNG) exports.

Moreover, recent producer cuts, maintenance events, and Freeport LNG’s normalization of gas demand post-outage have contributed to this rise. Cheniere’s announcement of no heavy maintenance for its liquefaction trains this year also supports higher prices.

In a Thursday note, Goldman Sachs strategists said the return of gas prices above $2/mmBtu aligns with their expectations, as production curtailments “would ultimately lead to lower storage congestion risks for this summer.”

“That said, we see only limited further upside from current levels, with stronger gas prices risking a return of congestion concerns,” they added.

Goldman notes that prices above $2/mmBtu reduce gas competitiveness compared to coal, with a $0.50/mmBtu increase potentially cutting gas demand by 1 billion cubic feet per day (Bcf/d), especially in shoulder months.

Moreover, higher prices may prompt the restart of previously shut-in wells. EQT (ST:), the largest producer in the Appalachia region, indicated it would resume production if prices sustainably exceed $1.50/mmBtu. And while Appalachia prices haven’t risen as much as NYMEX, the local hub has averaged $1.44/mmBtu month-to-date, up 10¢ from last month, strategists highlighted.

Elsewhere, European gas prices have also risen this summer, though less sharply than in the US.

Title Transfer Facility (TTF) prices increased 18% over the past three months to around 30 euros per megawatt-hour (MWh), holding steady in May.

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However, unlike the US market, this rally lacks fundamental support, with Northwest (NW) European gas storage at record-high levels, Goldman strategists pointed out.

“To be sure, NW European LNG imports have remained weak relative to last year – and are likely to get weaker in the coming weeks owing to a seasonal decline in global LNG production, exacerbated by outages at Australia’s Gorgon export project,” they said.

“Going forward, we expect healthy non-European demand for LNG to continue to incentivize a decline in European LNG imports vs last year,” they continued.

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Commodities

Gold prices trim some weekly gains on tempered rate cut hopes

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Investing.com– Gold prices fell slightly on Friday, trimming some of their gains for the week as comments from a slew of Federal Reserve officials offered a more sobering outlook on interest rate cuts. 

The yellow metal had risen to nearly $2,400 an ounce this week in the immediate aftermath of some soft U.S. economic readings. But it pulled back from these levels on Thursday and Friday.

steadied at $2,377.40 an ounce, while expiring in June fell slightly to $2,381.10 an ounce by 00:19 ET (04:19 GMT). 

Gold retreats as Fed officials downplay rate cuts, but weekly gains due

The yellow metal fell on Thursday after a string of Fed officials cautioned against bets on immediate reductions in interest rates. 

Several members of the central bank’s rate setting committee said the central bank will need much more convincing that inflation was coming down beyond a marginally soft inflation reading for April. 

This saw traders begin pricing out some expectations for a rate cut in September. The and also rebounded from earlier losses this week. 

Still, some softer-than-expected readings put gold on course for a 0.7% weekly gain. 

The yellow metal was also in sight of a record high of above $2,430 an ounce, although it appeared unlikely the level would be met in the near-term. 

Other precious metals retreated on Friday, but were set for bumper weekly gains. fell 0.2% but were trading up 6.2% for the week, while fell 0.4% but were up 4.5% this week. 

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Copper mixed amid middling China cues

Among industrial metals, one-month copper futures tumbled from two-year highs tracking middling economic data. But three-month copper futures pushed higher and were set for a stellar week as markets bet on tighter supplies and an eventual demand recovery in the coming months. 

on the London Metal Exchange rose 0.6% to $10,445.0 a ton, while rose 0.3% to $4.8935 a pound. 

Data from China on Friday painted a mixed picture of the economy. While grew more than expected, growth slowed and shrank at an accelerated pace. Growth in Chinese also slowed.

The readings presented a muddled outlook for the world’s biggest copper importer, as it rolled out more stimulus measures to shore up growth.

Three-month copper futures gained on the prospect of a demand recovery, and were up nearly 4% this week. They were also at two-year highs. 

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