Market watchers will tell you that big crops get bigger, specifically when it comes to monthly production estimates by USDA’s National Agricultural Statistics Service. If there is a bumper corn crop forecast in August, it seems to get larger and larger as the monthly estimates arrive in the fall. But is that always true for corn and is there any truth in that adage for soybeans? Will the November estimates be larger than the Oct. 9 projections?

Looking at the last 30 years of crop production estimates, Purdue marketing specialist Chris Hurt examined the trends linking the August through November crop reports. He theorizes that if big crops get bigger, then small crops should trend smaller. His focus was on the change in yield from September to October, and how it related to the change from October to November and the final estimate that USDA releases in January.

For corn Hurt says, “The odds were 73% that an increase (decrease) in the October yield estimate was related to an increase (decrease) in the November estimate. For the final yield in January 76% of the time higher (lower) yields in the October report related to higher (lower) yields in the final January report.” Hurt says when there was a two bushel change up or down from September to October, there was a 92% chance the January estimate would go in the direction set from September to October. He points to the recent report that boosted the September corn estimate from 161.9 bushels to the 164.2 bushels estimated in October.

Hurt says the implications for 2009 are derived from his 30 years of monthly comparisons. Based on the trend from September to October, he says that points to a 1.4 bushel per acre increase in the November report and a .2 bushel per acre increase that would be reported in January, which would place the final yield projection at 165.8 bushels per acre.

As an aside, Hurt says such an increase would mean an additional 127 million bushels of corn, but he believes the recent frost and freeze damage across the northern Cornbelt that affected 130 million bushels would be an offset to the increase. He contends USDA would not have to revise the projected 1.672 billion bushel carryover downward as the market expected after the freeze damage. And he suggests that the recent market uptrend would not be sustainable because the larger crop offset the weather damage.

But what about soybeans; can the same be said about larger crops getting bigger? Purdue’s Chris Hurt says the tendency for soybeans is not as strong and it is harder to make predictions about large soybean crops getting larger as the fall wears on. He says, “Over the last 30 years from 1979 to 2008, 67% of the time a higher (lower) yield estimate in October was associated with a higher (lower) yield in November and 63% of the time a higher (lower) October yield estimate was associated with a higher (lower) final estimate in January.” But while that seems to be a strong relationship, Hurt says if there are only small changes in the yield from September to October, the potential for predictions withers. And this year the September to October change was only .1 bushel.

Hurt says when the national yield forecast was less than .5 bushels, the final yield was anywhere from 1.7 bushels higher to 1.7 bushels lower than in September. Thus he says, meaningful clues just are not there for the yield trend in the current soybean crop.

Summary:
The market adage seems to be true that big corn crops get bigger. When there is at least a two bushel change up or down between the crop estimates in September to October, the trend will continue in that direction. That means the 2009 corn crop will get larger and the added bushels could offset the recent loss of bushels to frost and freeze damage. However, the same cannot be said for soybeans, particularly when the change from month to month is small as it is this year. Predictions for such trends in beans are more difficult than they are in corn.