Deutsche Bank and Goldman Sachs are both skeptical of USDA downgrades to the US corn crop. Deutsche and Goldman both raised their estimates to over 160 bpa in the last week and are standing by their forecasts. Other commentators share in the skepticism and expect to see the USDA number go up in future reports.
How did the USDA arrive at a 1.3% reduction in this years corn harvest estimates? Lance Honig, chief of the crops branch of the USDA’s National Agricultural Statistics Service, says the decline does not imply that the corn crop has deteriorated from last month, because the USDA used different procedures for estimating the size of the harvest. August is the first month the USDA surveys farmers and physically checks fields to determine its estimates. In previous months, it relies on statistical formulas because the crop has not sufficiently developed. From July 24 to Aug. 6, the USDA interviewed more than 24,000 producers about their yield expectations as of Aug. 1. The government will continue to survey the growers throughout the autumn to provide updated reports.