Premium
Forecasting Performance of Corn and Soybean Harvest Futures Contracts
Author(s) -
Kenyon David,
Jones Eluned,
McGuirk M. Anya
Publication year - 1993
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242924
Subject(s) - futures contract , economics , yield (engineering) , variance (accounting) , loan , agricultural economics , econometrics , government (linguistics) , financial economics , finance , metallurgy , materials science , accounting , linguistics , philosophy
In contrast to earlier periods, post 1973 spring prices of December corn and November soybean futures contracts have not been good forecasts of harvest price. Regression analysis of price forecast variance before and after 1973 indicates that the decline in forecasting accuracy is related to increased yield forecast errors and to reduced interference of government loan rates on market price determination. Since these futures are poor forecasts, producers should not rely on futures prices alone to allocate resources at planting time unless they simultaneously forward price.