Droughts tend to produce vast yield variations. This week's ProFramer [4] crop tour reaffirmed this tendency and as UBS notes, conditions declined with the expectations of low yields compounded by the harsher reality of poor quality - likely to be a major issue for corn feeders. Interestingly, Soybeans looked good from the road but up close (pod formation and beans/pod) were well below normal; and UBS adds to forget the CME for the moment - the cash market is now the attention grabber as they expect it to lead this rally in Ags higher - especially the July 2013s, raising an interesting question of if (or when) the US will restrict exports? Especially with no let-up in the drought conditions.
Lower yields AND lower quality...
With Corn and Soybean conditions data just awful...

and its not getting better anytime soon...
Charts: NOAA and UBS


