A lot of smart people use a lot of data to estimate grain stock numbers ahead of USDA’s reports, such as the stocks report estimates coming out Monday.

The analyst average estimates for the Sept. 1, 2024, U.S. grain stocks are:

Source: RJO Brien

Analysts also set betting lines for NFL football games. A lot of smart people use a lot of data to set these lines. Football lines predict which team will win and by how much. Americans are estimated to spend over $35 billion dollars betting on the NFL this season.

Whether estimating a USDA report or an NFL game, an analyst strives for accuracy. In each scenario, if estimates are incorrect and the true values deviate from your estimate, you may expose yourself to financial loss. Depending on your position in the grain or betting market, you can take steps to minimize that loss.

2024 NFL analyst performance

The chart below shows the gametime predictions for the teams predicted to win by the most points and the results of these games for the first three weeks of the 2024 season.

Takeaways: Analysts in a multibillion-dollar industry (with every tool and algorithmic model they can create) saw their most favored team lose in three straight weeks.

September quarterly stock analyst performance

The two charts below show analyst trade estimates versus the actual USDA stocks number. The bigger the bar the larger the difference between the estimate and the report number. 

Related:How much are we leaving in the field?

Source: RJO Brien

Source: RJO Brien

Takeaways: Analysts in a multibillion-dollar industry, using all the data and tools available, rarely predict the USDA September stocks report accurately.

Risk protection

NFL line setting and estimating the quarterly stocks report work very differently. The comparison is not perfect but meant to show even with all the resources, incorrect predictions are made.

The uncertainty surrounding the quarterly grain stocks report presents risks for farmers. Take time this week before the report to analyze where your market risk is and how you can minimize risk while staying flexible to potentially large market movements, which are likely when estimates are not as predicted.

Have questions? Feel free to contact me directly at 701-401-9600 or anyone on the AgMarket.Net team at 844-4AG-MRKT.

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. AgMarket.Net is the Farm Division of John Stewart and Associates (JSA) based out of St Joe, MO and all futures and options trades are cleared through RJO’Brien in Chicago IL. This material has been prepared by an agent of JSA or a third party and is, or is in the nature of, a solicitation. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading information and advice is based on information taken from 3^rd party sources that are believed to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. The services provided by JSA may not be available in all jurisdictions. It is possible that the country in which you are a resident prohibits us from opening and maintaining an account for you.

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