Grain Market Forecasting… in the Wilderness

In the months and years to come, no crop’s market will be immune from analytical process disruption.

Policies and market access inform cash grain price discovery today more than ever before. Cover crop subsidies and Clean Fuel Regulations (CFR) are rewriting the elements of market forecasting, in rye and canola already.

It’s important to recognize that the tradition of supply and demand analysis is a well-understood and proven economic model for commodity crop price forecasting. Far deeper than the jibber-jabber and day-to-day noise behind constantly-changing prices lies a foundation for adjusting the entire matrix of market influences in response to fundamental shifts.

The S&D Framework

A supply and demand table (S&D) is a spreadsheet containing a combination of hard data from government reports, and formulas that deliver mathematical results. If government data isn’t captured and reported accurately, or if the formulas contain too large of an error term, the results that drive forecasting become useless at best, and commercially risky to farmers and traders.