04/16/24 USDA Versus CONAB

I have long held the opinion after decades of watching USDA statistical performance that they are biased toward commercials over the interests of farmers in their processes. They seem to keep shortages a secret and understate demand until commercials have stolen grain from farmers before they admit that stock tightness existed. There was an instance that USDA did not get production right until forced to adjust stocks in the following year’s quarterly September stocks report, the last possible opportunity for them to do so. Farmers are forced by cash flow and high storage carrying costs to move their grain before USDA gets around to releasing information that benefits prices. When commercials own the grain then prices can go up. Markets go up on USDA data after farmers have sold. Farmers still own too much of last year’s corn crop which is one of the factors holding prices down. There are lots of instances but I believe that 1993 was one of the worst when that crop disaster was kept secret until their January report. That example was just one of many. I have learned to adopt this into my analysis accommodating for USDA process bias. CBOT price discovery accommodates the…