“The northern states could still end up with a really good yield, but there’s always the possibility of an early frost that increases the probability of late season losses. They’ve got a shorter window to work with, and the odds of something adverse happening in the latter part of the year are higher.”

So, Anderson says, “It’s pretty much déjà vu all over again. We’re in exactly the same situation we were in a year ago at this time. Everything is riding on this year’s weather — that’s going to tell the tale. At some point, we will get a normal corn yield — it didn’t happen last year, it may or may not happen this year, but it will happen. And when it does, supply fundamentals will turn quickly in the grain markets.”

Wheat stocks “are fairly comfortable now,” Anderson says. “I think we’ll see them come down some this year, but not to the level that people will get really concerned.

“One thing that’s interesting in the wheat market, if look at the crop condition, between freezes and dry weather it has  been a terrible year in the Plains, and the condition of winter wheat is pretty lousy. 

“Going back to the late 1980s, this year’s crop is in the bottom five in terms of condition. I was a little surprised, looking at the USDA numbers, at how small the effect on national average yield turned out to be as result of this condition situation. We’ve got about 40 percent of the crop rated poor to very poor.

“If we look at similar really bad years, the national average total wheat yield ended up only about 7 percent below trend. I don’t know the complete explanation. Wheat’s a very resilient crop, and there is some incentive for spring wheat growers to be more aggressive to smooth out the numbers.

“World wheat stocks are down a bit below the 20-year average, but not by a lot. I think the market is fairly comfortable with where we are.”

Looking at wheat and rice stocks together, Anderson says, “The fundamentals affect one another. Rice stocks, in total, look modestly below the 20-year average. If we look at what’s held by major exporters that’s going to be on the market, the total has got a lot bigger in last five or six years. I think the world’s pretty comfortable with the level of rice stocks, and that was even before we’d planted this year’s crop.”