USDA’s August production reports are far from the last word about the size of corn and soybean crops. Rather, the big government data dump due Aug. 12 is typically the agency’s first real estimate based on actual surveys of farmers and their fields.

Make no mistake, the upcoming release is a big deal, providing farmers, traders and end users with hard numbers about what to expect come harvest. And this year the estimates are expected to be big – not records, but more than slumping markets need.

Traders desperately search for patterns in previous prints for clues on what the agency will say. But decades of history don’t provide much of a tell about how well these growing season forecasts in August will hold up after the last fields are cut. And any production estimates don’t become “final” until after the Ag Census is updated every five years, and by then the market has largely forgotten.

But for now, August is good as it gets. So, what does the past say?

Price gains?

Though corn and soybeans have seen some big moves in the day and week after reports, changes since 1985 average out fairly close to even, based on the Southern Iowa cash price published by USDA. Corn tends to lose a little ground while soybeans gain a little, but both markets post gains around half the time.

Prices a week after the reports have more than an 80% probability of being in line with the day-after close, but the size of the swings may be more important than whether the direction is up or down.

Corn hangs on to gains of more than a nickel a third of the time and soybeans move a dime a third of the time, and some years these shifts are significantly larger.

So far 2024 witnessed some serious weather and financial market turbulence, but nothing on the order of magnitude seen in big move years in the past. Still, USDA reports are about expectations and markets can get emotional in a hurry.

Crops get bigger

While reports can produce violent trading, what matters for farmers in the long run is how perceptions of supplies vary over the months that follow August’s early estimate. The question is: Does the crop “get bigger” or does production decline? Most of the time both corn and soybean crops do grow, but it’s far from universal.

Final corn production readings were larger 54% of the time since 1965.

But the range of changes is many times larger than that.

Soybeans followed a similar trajectory, with the crop getting bigger 56% of the time.

Data isn’t final until it is

Changes to August data can show up as soon as September. And the National Agricultural Statistics Service, which conducts the USDA surveys, published a notice last week noting this prospect.

Production isn’t just a tally of total bushels, and the moving parts – planted and harvested acreage as well as yield – can be up for review. So-called “annual” estimates are one of the big stories for the January report day. More reviews can show up the following September after the end of the marketing year, before the “final” sizes are established with the Ag Census every five years.

As is the case with total production, over the years these variances in acreage and yield average out about even, masking individual years when the components change dramatically.

Average changes for soybean acres and yields were also small, though acreage revisions were a bit larger than for corn.

Beware big surprises

Though the averages even out, some years revisions in acreage and yield are much larger.

But swings in soybeans seem to happen more frequently, with weather often a contributing factor.

Notable corn swings also went up and down.

Market may react swiftly

While the process from August to final takes time, price reactions after the August reports some years set the pattern right away. So, while history doesn’t offer much advice on what USDA will say Aug. 12, the market’s reaction is a signal that expectations were wrong, as the data ultimately will show.

And in the end, acreage, yield and production are only part of the story.

The other report out Aug. 12, USDA’s World Agricultural Supply and Demand Estimates, folds the production data into a forecast for whether supplies at the end of the marketing year will be bigger or smaller, and what this means for average cash prices. That’s the bottom line the market cares about, and so should you.