FORECASTING PERFORMANCE OF CORN AND SOYBEAN HARVEST FUTURES CONTRACTS

In contrast to earlier periods, post 1973 spring prices of December co rn and November soybean futures contracts have not been good forecasts of harvest price. Regression analysis of price forecast variance befo re and after 1973 indicates that the decline in forecasting accuracy i s related to increased yield forecast errors and to reduced interferen ce of government loan rates on market price determination. Since these futures are poor forecasts, producers should not rely on futures pric es alone to allocate resources at planting time unless they simultaneo usly forward price.