The National Agricultural Statistics Service (NASS) of the USDA will release the first yield and production forecasts for the 2012 U.S. corn and soybean crops on Aug.10.  

The first forecasts of the season are always highly anticipated, but none more than this year as widespread drought conditions have resulted in a wide range of yield and production expectations, according to University of Illinois agricultural economist Darrel Good.

“While the USDA’s August forecast will provide a benchmark for the size of the 2012 corn and soybean crops, the market will continue to form yield expectations beyond the release of the report,” Good said.

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Analysts use a combination of techniques to judge yield potential, including crop condition ratings, crop weather models, satellite imagery, and analogue years.  

“In the case of analogue years, there were six previous years since 1960 when the U.S. average corn yield was more than 10 percent below the unconditional trend yield. The shortfall in those years ranged from 10.4 percent to 25.6 percent and averaged 17.5 percent.

A U.S. average yield 17.5 percent below trend would result in a 2012 average yield of 131 bushels, while a yield 25.6 percent below trend would result in an average yield of 118 bushels.

“There were also six previous years since 1960 when the U.S. average soybean yield was more than 10 percent below the unconditional trend yield. The shortfall in those years ranged from 11.8 percent to 19.3 percent and averaged 14.9 percent.  

“A U.S. average yield 14.9 percent below trend would result in a 2012 average yield of 36.7 bushels while a yield 19.3 percent below trend would result in an average yield of 34.8 bushels,” Good said.

Good reported that, in addition to yield, the size of the 2012 crops will be influenced by the magnitude of harvested acreage.

“Harvested acreage, particularly for corn grain, may be unusually small in relation to planted acreage, further reducing production potential. The corn and soybean markets continue to trade smaller and smaller crops, but prices may not yet reflect the full extent of production shortfalls,” he said.

Good provided a review of the NASS methodology for making corn and soybean yield and production forecasts.