Revisiting USDA Corn and Soybean Grain Stocks Estimates

The June 1 estimates of corn and soybean stocks released by the USDA on June 30 provided some big surprises. The corn stocks estimate was about 200 million bushels larger than anticipated, while the soybean stocks estimate was about 40 million bushels larger than anticipated. The larger corn stocks estimate has especially contributed to the “heaviness” of corn prices in recent weeks. This certainly has not been the only example of the USDA grain stocks reports providing a major surprise to the market in recent years. In fact, the grain stocks estimates have generated enough controversy that the Office of the Chief Economist of the USDA commissioned a study to examine this, and other, issues related to USDA forecasts (Irwin, Sanders, and Good, 2014). Several farmdoc daily articles subsequently featured different parts of the study. (January 17, 2014; January 29, 2014; February 7, 2014; February 13, 2014; February 14, 2014). The study found that there had indeed been a sharp decline in analysts’ ability to anticipate actual quarterly corn stock estimates beginning with the start of the 2006 marketing year. The availability of data for three more marketing years provides an opportunity to update our previous analysis and determine whether the “problem” with corn stocks estimates has continued or not. In addition, we also analyze in this article the typical degree of uncertainty in the crucial September 1 corn and soybean stock estimates.

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