Chicago | Reuters — A U.S. Agriculture Department (USDA) unit is reviewing its procedures after posting incorrect crop data online on Wednesday, an error that temporarily pressured grain prices.
The Farm Service Agency (FSA) inadvertently issued the wrong data on crop acreage around 5 a.m. CT and posted corrected data four hours later.
The agency is investigating why the error occurred and reviewing procedures “to make certain there are checks to avoid any future errors of this sort,” FSA spokesman Kent Politsch said.
Some traders said the error eroded their confidence in USDA, which is considered the gold standard for data on crop production, supplies and demand.
“The whole thing was funny, embarrassing, very much so for the FSA,” said Ted Seifried, vice-president of the Chicago brokerage Zaner Group.
The erroneous data showed that U.S. farmers reported they could not plant 1.622 million acres of corn as of Sept. 3, down from 2.301 million acres reported in August, and 848,000 acres of soybeans, down from 2.173 million in August.
The numbers pushed down futures prices as traders projected the declines in so-called “prevented plantings” would translate into increased production.
One trader said the drop in prices automatically triggered his pre-placed order to exit a position in wheat futures. The market later recovered before trading back down to the trigger price, indicating the order was probably executed earlier than it would have been had FSA not issued the incorrect data, he said.
After 9 a.m. CT, the FSA issued corrected data, which increased prevented plantings to 2.352 million acres for corn and 2.219 million for soybeans.
The agency removed the incorrect data from its website after it was posted and intentionally delayed the release of the correct data so that users were aware it was coming, a USDA official said.
Still, officials may face criticism for the error next month at an annual USDA data users’ meeting in Chicago.
“USDA deserves the embarrassment of this colossal mistake,” tweeted Bill Nelson, analyst for Doane Advisory Services in St. Louis.
October is the first month in which USDA’s National Agricultural Statistics Service (NASS) considers FSA acreage data when making its own acreage estimates for a monthly crop report.
Lance Honig, chief of the crops branch for NASS, said he feels “every bit as confident in the FSA data as I did before today… They took very quick action to correct it.”
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago.