Some Perspective on the USDA's August 1 Corn and Soybean Yield Projections

The August 1 U.S. average corn and soybean yield projections, at 175.1 and 48.9bpa, respectively, were record large and a major surprise to the market. While these are indeed "big" yields in an absolute sense, it is an open question whether these are truly "monster" yields. We provide some perspective on that issue in today's article. For corn, this comparison shows that the August 1 yield projection is 10.9 bushels above trend, but it would only be the 8th highest deviation since 1960. While this would certainly be a very good corn yield by historical standards, it would not even be among the top 5 largest positive trend deviations. For perspective, the highest trend deviation of 18 bushels in 2004 would translate into a yield of 182.2 bushels in 2016. In contrast, the August 1 trend deviation for soybeans would be 3.9 bushels per acre and the second highest on record. It is especially interesting to observe that if the August 1 USDA soybean yield verifies then three of the five highest positive trend deviations for soybeans since 1960 will have occurred in the last three years. Either we have had an extraordinary run of favorable weather for U.S. soybean production in the last three years or soybean technology and management have made a discrete jump, or both.