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….

Other Spring Wheat July Yield Forecast vs Condition Index

Other Spring Wheat Harvested Percent of Planted vs Final P/VP Condition Total

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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