Published on: 2024/09/5
In Q2 2024, we launched our Crop Yield Forecaster, enabling stakeholders to anticipate crop yields months before harvest. After extensive backtesting, we found our February forecast to be more accurate than the USDA’s August outlook, offering valuable insights for agricultural decision-makers. Read more about our process here.
However, models are only as good as their real-world performance. This summer, we closely monitored market trends and soybean prices to assess how well our forecast held up.
The Soybean Summer of '24: A Closer Look
Below, you’ll find a graph capturing:
- Our end-of-year yield forecast, first issued in February and updated monthly
- USDA outlook, first issued in May and updated monthly
- Expected yield based on historical trends
- Average price of November '24 Soybean.
How It Unfolded
- February: Our forecast projected yields slightly above trend.
- May: The USDA released its outlook, predicting yields slightly below or on trend, which triggered market movement.
- June: We revised our forecast upwards based on new soil moisture data, indicating yields above trend. The USDA’s outlook remained slightly below trend. Leveraging this discrepancy and with the help of an industry partner, we decided to go short in July and exit in September.
- August: The USDA’s forecast aligned with ours. Prices continued to drop, benefiting our position.
- September: We exited the trade.
Putting It in Perspective
We acknowledge that n=1 and that many factors influence market movements. That’s why we’ve taken a multi-year approach, evaluating our model’s performance over decades. As demonstrated in previous analyses, our forecasts consistently lead the USDA’s by several months, providing significant value to agricultural stakeholders. The graph below illustrates how USDA reports align with our February forecasts.
Curious?
If you’d like to explore our technology further, experiment with our hindcast data, or discuss a specific case, please reach out to us. We’d be happy to arrange a demo or a consultation.
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