Drought  conditions that impacted corn  and soybean production  in many areas of the U.S. in 2012 generally began in June. By the end of the growing season, large precipitation deficits developed in some areas. Some of those areas remain very dry, while more normal levels of precipitation have been received in other areas since August.
The December 11, 2012 U.S. Drought Monitor Map  also indicates that extreme to exceptional drought conditions exist in much of the Great Plains. These current drought conditions lead to concerns about moisture deficits continuing into 2013 and the possibility of sub-par corn and soybean yields again next year. While soil moisture deficits going into the 2013 planting and growing season are of concern, it appears that some observers and analysts are forgetting a basic fact about the relationship of crop yields and weather. A large body of research  (pdf) shows that corn  and soybean  yields are overwhelmingly determined by summer weather conditions, with July weather being the most important. Yes, preseason moisture deficits can impact yield for the upcoming crop but this impact is typically quite small relative to the impact of precipitation and temperature during the reproductive periods for corn and soybeans, a fact that should be all too obvious after the "flash drought" of summer 2012.
In this light, the relevant question is NOT the potential impact of current moisture deficits on yields in 2013, but instead do the deficits signal anything about weather patterns next summer? More specifically, is there any historical relationship between precipitation levels experienced in one year and precipitation levels the following summer? We investigate this issue using historical precipitation data over 1895-2012 for Illinois, Indiana, Iowa and Nebraska. This is the longest available dataset available from the National Weather Service and it should provide the most accurate estimates of the correlations going forward, assuming that climate change has not substantially altered weather patterns.
Careful analysis of the historical record indicates that recent precipitation levels and current soil moisture conditions provide little guidance in forming expectations for precipitation levels next summer. Historically, odds of favorable or unfavorable growing conditions have been independent of precipitation levels in the last half of the previous year. Beyond this particular analysis, we would expect to find general independence of year-to-year weather conditions. We reported on such independence, for example, in average winter and summer temperatures in a post  earlier this year.
It is important to emphasize that we are not attempting to forecast 2013 summer precipitation levels in corn and soybean-producing areas of the U.S. Expectations about weather conditions in the summer of 2013 may be influenced by factors other than recent and current weather. These factors would include, for example, expectations about El Niño/La Niña-Southern Oscillation events and general climate patterns. The point is that making a connection between current moisture deficits and next summer's weather must be based on these "other" factors. There is simply no general tendency for current conditions to reliably predict what will happen that far into the future.
As a final point, we note that prior to the growing season new crop corn and soybean prices should reflect some risk of sub-par average yields in 2013. That "risk premium", however, should probably not be much larger than in any other year based solely on current moisture conditions. Current forward prices for the 2013 crops of corn and soybeans are well above the levels that existed before the drought of 2012 and likely reflect substantially more than average yield risk.