Another big USDA report, and another moment where many commodity analysts were caught off guard about acreage estimates.
Heading into the June Acreage report, traders collectively believed USDA might increase corn acres by 400,000 from USDA’s 89.5 million estimate in March. Conversely, the trade expected a modest decline from USDA’s March soybean estimate of 91.0 million to 90.5 million in June.
Ahead of USDA’s June 30th report, FBN released its own forecasts on June 27th — based on member contributed data — which told a much different story. Namely, soybean acres were likely to fall much more aggressively than the trade expected, and our peg was at 89.0 million acres — a full 1.5 million acres less than the average of analysts. Indeed, USDA’s June soy acreage forecast at 88.3 million acres was a shock to the trade but not to FBN’s farmers who had read the report and were prepared for a bullish soy estimate.
For corn, USDA was mostly where the trade expected at 89.9 million acres, and although FBN was on the high side of the trade at 90.4 million acres, we felt the bullish bean / bearish corn story warranted corn pricing action ahead of the report. On June 28, 2022, FBN issued sales recs at $6.60 Dec corn futures ahead of the report, and with current post-report values of $6.20 this has seemed like a prudent course of action.
Now two years in as a forecasting group, FBN has demonstrated its proven accuracy around key acreage reports. This is a result of a large number of FBN farmers participating in the surveys, which leads to actionable insights and enhancement of our member’s marketing abilities.
The table below illustrates forecasting accuracies for corn and soybeans of various analysts for the last four acreage reports during which FBN has used member surveys to provide forecasts. Compared to the shown analysts, FBN has achieved a much lower forecasting error during this period with an average error of only 1 million acres. That is 30% better than the next best forecaster, and well below most analysts — which have substantially larger errors of 1.8 to 2.5 million acres. We believe this illustrates the power and uniqueness of FBN’s crowdsourced data approach for using member data to improve marketing outcomes.
Avg Analyst (Range)
Survey participation is key. If you were a respondent, thank you. With the report in your hands ahead of others, you were set up to make key marketing decisions before USDA’s release.
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