How issues with the USDA’s new export sales reporting system are impacting grain markets

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The new USDA export sales reporting system was taken down the same day it was launched, August 25, and has since gone offline, with no agency timeline for when the system will go live.

One of the nation’s top commodity market analysts says the USDA software issue is impacting grain and livestock markets.

“They tried to fix something that wasn’t [broken]says Arlan Suderman, chief commodities economist at StoneX. He says the USDA’s Foreign Agricultural Service attempted to launch its new export sales reporting and maintenance system last week. However, Suderman says the new system was only taken down after a few hours.

“The numbers didn’t seem believable compared to what we’ve seen in terms of sales over the previous weeks in the daily snapshot numbers,” according to Suderman. “The USDA then pulled those numbers and then they said all export sales reporting has been suspended, except for daily flash reports, until further notice.”

He says the USDA decided not to bring the old system back online when the new export reporting system was removed.

Arlan Suderman, Chief Commodities Economist at StoneX. Photo: Hoosier Ag Today.

“It really leaves us in the dark about what’s happening on the export front at a critical time of year when the world grain and oilseed supply is relatively tight. When there are big questions about the size of our crops and there’s not a lot of wiggle room in the balance sheet, if we were to have a big customer like China that was buying aggressively, they might maybe do it in the dark at night, so to speak, and the market wouldn’t know until after the fact,” Suderman says.

He adds that USDA’s export numbers over the past week may not have been accurate either, which could negatively impact commodity prices.

“The daily report flash notices are still in place and flag some sales, but these tend to miss most of the sales that are out there,” according to Suderman. “Right now we’re flying in the dark and what’s happening on the demand side as we worry about these crops dwindling.”

Suderman thinks the USDA should consider bringing the old export reporting software system back online.

“We kind of thought maybe they’d go back to their old reporting system, which we honestly thought was very good and one of the best in the world I would say, but they haven’t done that yet and they’ve kindly to leave us in the dark as to when we can anticipate seeing some type of improvement, but, in the meantime, the old system is looking good right now if we could just pick it up,” says- he.

Suderman tells Hoosier Ag Today that since the export reporting system is offline, export sales to China and unknown destinations may have been underreported by the USDA by up to 50%.

On Thursday August 25, the USDA issued the following statement:

“Today, the USDA Foreign Agricultural Service launched a new export sales reporting and maintenance system. It is the system by which US exporters are required by law to report any sales transactions entered into with buyers outside the US for a number of key commodities. Information collected through the system is aggregated and reported to the public weekly by FAS.

During today’s launch, FAS encountered challenges that affected the physical release of data as well as data quality. As a result, the agency has taken the system offline and is withdrawing the weekly export sales information released earlier in the day.

Data integrity, credibility and transparency are top priorities for FAS, and timely and accurate reporting of agricultural export sales data is essential to the proper functioning of markets. FAS recognizes the disruption this situation has caused and is taking immediate action to address it.

Today’s problems arose despite measures taken over many months to transition exporters to the new system and to ensure the accuracy of reported data. FAS management fully recognizes the impacts and is committed to resolving current issues and keeping our stakeholders informed as we do so.

Click BELOW to listen to CJ Miller’s report on the impact of issues with the USDA’s new export sales reporting system on grain markets.


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