Last Friday USDA provided a much bigger 1 March quarterly stocks estimate for corn than anyone in the trade expected. The number came in at 270 million bushels (nearly 7 MMT) above the average trade guess, which is one of biggest “misses” ever. 62 percent of those stocks are in farmers’ storage bins. The assumption must be that USDA will increase the 2018/19 corn ending supply estimate by 270 million bushels or at least close to that. Such a huge adjustment means two things to the corn market. First, it takes pressure off the 2019 corn yield. That is equivalent to a 3.2 bushel/acre yield increase or, alternatively, planting another 3 million acres of corn. Wow! Second, the larger-than-expected corn planting estimate was a...
From WPI Consulting
Forecasting developments in production agriculture
On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.