Grains –
This morning we’re looking at some of the acreage numbers ahead of the report on Friday. For reference, here is a quick breakdown of the average guesses:
Today we’re simply looking at whether there is any tendency of the average guesses vs. the actual USDA numbers. For our purposes this morning, we’re only going to look at corn and soybeans. We’ll discuss wheat at some point later this week.
The chart below breaks down the individual corn and soybean actual figures vs. the average guess. The first thing that immediately sticks out in the chart is there seems to be a general tendency for soybean area to come in less than the average guess over the past few years. Only in 2014 did the actual figure turn out to be larger than the average guess, and even in that case the miss was fairly small.
The second item that stands out is there doesn’t appear to be any particular bias present in corn. Clearly in corn the major miss on last year’s report is what stands out. With that in mind I also combined the two together for the second chart below. This shows the combined acreage vs. the combined average guess. Again generally you can see there is a tendency for the combined acreage total to come in slightly less than the average guess, but as mentioned above that is largely due to soybeans. Last year’s big miss to the upside in acreage stands out as quite an outlier.
So what happened last year? Well, I think I’ve mentioned before that the USDA (until this year) has been banking on declining acreage in their Outlook Forum projections due to lower projected farm incomes as crop prices have come off their highs. This has thus far proven incorrect, but in the case of last year I think it proved costly to the market as I think the relatively low starting point of the 2016 Outlook Forum fooled most. We’ll discuss March USDA figures vs. Outlook Forum figures in more detail tomorrow.
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