Crops –
No major remarks to make following yesterday’s USDA report deluge. For the most part, things fell pretty close inline with our expectations yesterday. I didn’t get everything right of course, but generally speaking things trended as expected.
One thing I most certainly got wrong was the expectation for a smaller than expected spring wheat crop. I think NASS’s starting point is clearly too optimistic. I’ll present the following charts without much commentary as they pretty much speak for themselves….
So clearly I think NASS is optimistic on their projections for both yield and harvested area. We’ll see how this shapes up. Despite my pessimism towards crop prospects relative to NASS, I do view the MW board with some skepticism in the short term here as well. The speculative fervor has swelled in MW quickly, with lots of different news/financial articles published on the move recently. It is plain that this market is loaded up with bullishness. In the long run, I think that is probably the right call. In the short run, we know corrections in such an illiquid market can be highly unforgiving. Be careful.
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