Tuesday, August 25, 2009

Week 21

Greetings from Los Banos Philippines. I have moved across the great firewall of China and can now post my blog directly, although the time difference means a slight delay. Being here has kept me from making an first hand observations about the crop in the US and I'm separated from the buzz, so I was quite surprised in the improvement in crop conditions this week but I should say here that I don't take any one week's movement very seriously as other factors have been know to push the condition ratings for a short amount of time.

In corn and soybeans it was a nearly universal held or improved yields. Illinois did show a very slight decline in the uncorrected model, but the western half of the corn belt, NE, KS and SD showed above average gains. The models are clearly converging as we approach harvest. Cotton, as is common, is a mixed bag where the distributional effects can be substantial as abandonment moves around. The corrected model held flat, as the needed correction declined, the uncorrected model which rigidly tracks week to week condition movements decline, but only modestly for production. I'm still quite a bit higher but I've been getting emails which suggest I'm probably on the correct side of USDA, but so far nobody will anonymously post supporting comments so you have to take my word for it.

I added the corrected model after some discussion with others about how conditions tended to evolve over the season. This year may be one of those years where it wasn't strictly needed. The upward climb of the corrected model isn't due to improving conditions, it is because there is less time for 'something to go wrong'. Should I ever be made of time, I'll go back and historically track the two models in previous years to see how they behave under different situations. In theory, the corrected model should offer the best year to year estimate, however, it could simply be the influence of the 'bad' years such as 1988 or 1993.

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