What You Need To Know About The USDA’s August Production Estimate

Remember, this is the USDA’s or National Ag Statistics Service’s (NASS) first official assessment of the 2014 corn yields. This corn yield forecast is believed to be based on actual in the field measurements by trained enumerators. Before the August Crop Report, it is believed that USDA yields are derived exclusively from trend lines and computer projections based on weekly weather and crop condition surveys. These forecasts arise from meticulous late-July counts and measurements by the team at USDA/NASS. From what I’m told, in late-July, USDA/NASS has enumerators go into fields and record stand counts and ear counts to obtain an estimate of ears per acre. Statisticians generate yield estimates based on these counts and compare them to those of the last five years.  We all know that late-July is still too early to get final kernel counts per ear and final kernel weights, but for argument sake, I’m told forecasters are told to assume near “normal” weather during the remainder of the grain filling season.  This early-field work and weather uncertainty, in my opinion, is what makes the USDA’s August report so difficult and at times extremely volatile.  Make sure you are preparing yourself for a possible wild-pitch…this August number has been know to really throw the trade for a loop. Remember, by the time the September yield forecast is published (based on late-August samples), kernel numbers are likely set and thus yield forecasts are more accurate and comparable to final yields.