FUTURES-BASED PRICE FORECASTS FOR AGRICULTURAL PRODUCERS AND BUSINESSES

The forecasting accuracy of five competing naive and futures-based loc alized cash price forecasts is determined. The third week's price each month from 1987-96 is forecasted from several vantage points. Commodi ties examined include those relevant to Midwest producers: the major g rains, slaughter steers, slaughter hogs, several classes of feeder cat tle, cull cows, and sows. Relative forecasting accuracy across forecas t methods is compared using regression models of forecast error. The t raditional forecast method of deferred futures plus historical basis h as the greatest accuracy-even for cull cows. Adding complexity to fore casts, such as including regression models to capture nonlinear bases or biases in futures markets, does not improve accuracy.