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Season-Average Price Forecasts

Using Futures Prices to Forecast the Season-Average Price and Counter-Cyclical Payment Rate for Corn, Soybeans, and Wheat

Overview

Farmers and policymakers are interested in the level of counter-cyclical payments (CCPs) provided by the 2008 Farm Act to producers of selected commodities. CCPs are based on the season-average price received by farmers. (For more information on CCPs, see the ERS 2008 Farm Bill Side-By-Side, Title I: Commodity Programs.)

This data product provides three ExcelExcel file spreadsheet models that use futures prices to forecast the U.S. season-average price received and the implied CCP for three major field crops (corn, soybeans, and wheat). Users can view the model forecasts or create their own forecast by inserting different values for futures prices, basis values, or marketing weights. Example computations and data are provided.

Spreadsheet Models

For each of the three major U.S. field crops, the ExcelExcel file spreadsheet model computes a forecast for 1) the national-level season-average price received by farmers and 2) the implied counter-cyclical payment rate.

Note: the model forecasts are not official USDA forecasts. See USDA's World Agricultural Supply and Demand Estimates for official USDA season-average price forecasts. See USDA's Farm Service Agency information for official USDA CCP rates.

Forecast Updates

The Excel files are updated monthly and will be posted on the same day as the release of USDA's World Agricultural Supply and Demand Estimates (WASDE). See the ERS Calendar of Releases for the schedule.

Source Report

Users are highly encouraged to read Forecasting the Counter-Cyclical Payment Rate for U.S. Corn: An Application of the Futures Price Forecasting Model (January 2005). This report provides background information on the futures forecast model for corn, its data requirements, the forecast procedure, and forecast results for crop years 2003/04 and 2004/05.

Model Components

Each spreadsheet model (corn, soybeans, and wheat) contains seven separate worksheets. The forecasts are provided on a marketing-year basis (September-August for corn and soybeans and June-May for wheat).

  • The Contents sheet provides an explanation of each spreadsheet in the file.

  • The 2011/12 forecast worksheet provides:
    • A weekly forecast of the season-average farm price received and implied counter-cyclical payment rate. Users may change the weekly forecast by going to the Change forecast worksheet.
    • A chart of weekly forecasts for the entire marketing year.
    • An explanation of the detailed computational steps for the weekly forecasts for the marketing year.
  • The 2010/11 forecast worksheet provides:
    • A weekly forecast of the season-average farm price received and implied counter-cyclical payment rate. Users may change the weekly forecast by going to the Change forecast worksheet.
    • A chart of weekly forecasts for the entire marketing year.
    • An explanation of the detailed computational steps for the weekly forecasts for the marketing year.
  • On the Change forecast worksheet, users can change the model's forecasts by inserting their own numbers for futures prices, monthly basis values, and/or monthly marketing weights.

  • The Definitions worksheet defines key terms associated with the futures forecast model.

  • The Documentation worksheet provides a brief description of the forecast model, data sources, and forecast procedures.

  • The Data worksheet provides current and historical data needed to produce the marketing-year forecasts:
    • Weekly and monthly futures prices of the nearby contract by marketing year,
    • Monthly and annual farm prices received by marketing year,
    • Monthly basis values by marketing year,
    • Monthly marketing weights by marketing year,
    • Monthly season-average-price-received projections from WASDE, and
    • Policy parameters (target prices, loan rates, and direct payment rates).

Historical Forecasts

Excel files that contain forecasts for previous marketing years:

2009/10 Corn Soybeans Wheat
2008/09 Corn Soybeans Wheat
2007/08 Corn Soybeans Wheat
2006/07 Corn Soybeans Wheat
2005/06 Corn Soybeans Wheat
2004/05 Corn Soybeans Wheat
2003/04 Corn Soybeans Wheat

Related Research

Using Futures Prices to Forecast the Season-Average U.S. Corn Price (a paper presented at the NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management in St. Louis, MO, April 19-20, 2004) provides the theoretical background and forecast accuracy of the futures price model.

Related Briefing Rooms

Corn
Soybeans
Wheat
Farm and Commodity Policy

 

For more information, contact: Linwood Hoffman

Web administration: webadmin@ers.usda.gov

Updated date: November 9, 2011