Darrel Good
Darrel Good
consider expanding forecasts industry market order range scope subjective uses wider yield
The USDA may want to consider expanding the scope of the subjective yield surveys it uses in making the forecasts in order to incorporate a wider range of market and industry participants.
additional contrary farmers gain markets profits provides view
This is contrary to the view that the markets are inefficient and provides substantial opportunities for farmers to gain additional profits through marketing.
based crop estimates forecasts generates objective production survey types yield
The USDA generates crop production forecasts based on estimates of planted and harvested acreage and two types of yield indications -- a farmer-reported survey and objective measurements.
appeared direction errors forecast size study trend
There appeared to be no trend in the size or direction of forecast errors over the study period.
corn current demand favorable production relatively seem
Current world production and demand prospects, however, seem to be relatively more favorable for corn than for soybeans.
appears based current discourage increase large level prices
Based on current conditions, however, it appears that the soybean prices need to be at a level to discourage a large increase in U.S. acreage in 2006.
appears billion corn crop forecast implies market means obviously ration sensitive smaller stocks trading vice
A stocks-to-use ration of 8.8 percent, then, means 2006-07 year-ending stocks of 1.047 billion bushels, implying a crop of 9.966 billion bushels. That is, the market appears to be trading a 2006 corn crop that is 1.146 billion bushels, or 10.3 percent, smaller than the 2005 crop. That calculation is obviously sensitive to the forecast of use. A smaller forecast of use implies a smaller crop and vice versa.
billion crop near produce trend yield
A trend yield near 150 bushels, then, would produce a 2006 crop of 10.92 billion bushels.
appears corn demand prospects stronger
At this juncture, it appears that U.S. corn consumption and demand prospects are stronger than prospects for U.S. soybeans.
factors market next production prospects south three
South American soybean production prospects will be one of the more important market factors for the next three months.
appear calendar persist prices range settling trading
Prices now appear to be settling into a trading range that may persist into the first of the calendar year.
based current implies marketing price projection ratio relationship since year
Based on the relationship between the stocks-to-use ratio and price since 1998-99, a price of $2.51 implies a 2006-07 year-ending stocks-to-use ratio of 8.8 percent. In comparison, the current projection of the stocks-to-use ratio for the 2005-06 marketing year is 22.4 percent.
appearing forecasts impact larger largest prices production reactions recent similar somewhat
Similar to corn, USDA soybean production forecasts had the largest impact on soybean futures prices in August, with recent price reactions appearing somewhat larger than in the past.
cash central corn expected given high higher illinois magnitude marketing might next past price prices six sometime strength suggesting surplus surprising year
The price strength has been a little surprising given the magnitude of the surplus in U.S. corn inventories. However, over the past 32 years, the central Illinois cash price has never established a marketing year high in February, suggesting that even higher prices might be expected sometime over the next six months.