One of the curious developments from the August WASDE was USDA’s handling of the European, Russian, and Ukrainian corn and wheat balance sheets. The EU has battled significant drought and heat this year, while Russia and Ukraine are increasingly locked in a battle for control over the Black Sea and Sea of Azov that is effectively blocking grain (and other products) exports from the region. Despite these realities, the USDA’s numbers look far rosier than what the market is pricing in.  Let’s start by reviewing the USDA’s adjustments to these crops and their export forecasts this month. For Wheat:

USDA cut EU wheat production by 1.8 MMT but left exports unchanged USDA left Russia’s wheat crop unchanged at 8...