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Can Satellite Data Forecast Valuable Information from USDA Reports ? Evidences on Corn Yield Estimates

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  • Piette, Pierrick

Abstract

On the one hand, recent advances in satellite imagery and remote sensing allow one to easily follow in near-real time the crop conditions all around the world. On the other hand, it has been shown that governmental agricultural reports contain useful news for the commodities market, whose participants react to this valuable information. In this paper, we investigate wether one can forecast some of the newsworthy information contained in the USDA reports through satellite data. We focus on the corn futures market over the period 2000-2016. We rst check the well-documented presence of market reactions to the release of the monthly WASDE reports through statistical tests. Then we investigate the informational value of early yield estimates published in these governmental reports. Finally, we propose an econometric model based on MODIS NDVI time series to forecast this valuable information. Results show that market rationally reacts to the NASS early yield forecasts. Moreover, the modeled NDVI-based information is signicantly correlated with the market reactions. To conclude, we propose some ways of improvement to be considered for a practical implementation.

Suggested Citation

  • Piette, Pierrick, 2019. "Can Satellite Data Forecast Valuable Information from USDA Reports ? Evidences on Corn Yield Estimates," 2019 Conference, April 15-16, 2019, Minneapolis, Minnesota 309635, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:n13419:309635
    DOI: 10.22004/ag.econ.309635
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    References listed on IDEAS

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