Effects are positive when cover crops are managed to improve infiltration and decrease evaporation, or to remove water from a wet soil to allow timely establishment of the next crop. Cover crops are better suited to humid and subhumid regions where precipitation is more reliable than to semiarid regions where precipitation is limited. Where cover crops are not used, use of conservation tillage that involves crop residue retention on the soil surface helps conserve soil water and provides many of the benefits of cover crops, except for nitrogen fixation, soil nutrient (especially nitrate) uptake to prevent leaching, excess water removal, and additional organic matter inputs.
Water conservation
Cover crops alter many aspects of the hydrologic cycle. They increase evapotranspiration while growing and can enhance water infiltration into soil, slow runoff rates, and reduce soil erosion in both conventional-till and no-till systems throughout the year. However, the difference between the results of plot and watershed studies demonstrate that caution should be taken in extrapolating plot data to watershed scales. As scale increases, so does the influence of hydraulically-controlling subsurface soil horizons. Unfortunately, most of the available cover crop research comes from relatively small plats and very few watershed studies have been initiated in recent years. Perennial cover crops offer the potential for altering the porosity of subsurface soil horizons so as to increase future soil productivity and reduce future runoff amounts and rates.
http://www.jswconline.org/content/53/3/207.abstract