NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.
Review conducted by University of Illinois is ongoing.
The study of USDA reports being conducted by University of Illinois economists will now likely be issued sometime in late October or beyond, according to contacts.
USDA Chief Economist Joe Glauber enlisted University of Illinois economists, including Scott Irwin and Darrel Good, to review USDA report estimates including those for the Supply/Demand and Grain Stocks reports. The economists have been gathering and reviewing data since at least February, meeting with staff from the National Ag Statistics Service and the World Agricultural Outlook Board in the effort and will also be including the September 30 Grain Stocks report as part of their review.
The study arose as USDA has been examining issues relative to the reports and why trade expectations at certain times - especially for the Grain Stocks data - have been markedly different.
Traders continue to think that USDA is not adequately accounting for what they say has been a significant increase in on-farm storage in key corn areas of the country and that corn-based ethanol has a more efficient extraction rate than USDA currently assumes.
It's not clear yet that the University of Illinois study will find that "smoking gun" in the data that will help explain the divergence between trade expectations and actual data released by USDA. Some sources signal what they have seen of the University of Illinois work indicates they haven't yet identified a major cause for the spread between expectations and actual data.
Timing of the release is now expected later this fall, with most observers concluding it will not come until after USDA holds its annual data users meeting Oct. 21, in Chicago. Other sources simply have said they expect it to be completed "later this fall."
COMMENTS: The report may echo what USDA's own analysis of the situation has been - they have not been able to determine why the spread between expectations and actual data has arisen. And, on the farm storage front, NASS does track that data and has been reporting an increased level of on-farm storage facilities on an annual basis the past several years. That would tend to suggest that if traders are on the mark with their contention on ethanol extraction rates, that may be the "smoking gun." But odds are the corn-based ethanol component of usage probably has reached a plateau of sorts given the expectation that EPA will reduce the RFS requirements for 2014 compared to the levels spelled out in law. And the corn-based ethanol component was poised to top out in 2015 as well under the 2007 energy law.