Well I gave my "Chicken Little the sky is falling" on the production side above.. and I'll balance that out with the flip side of the coin.  There is HRW Wheat inventory much of it is sitting in the terminals or the elevators "earning the carry."  A drought affects the buyers of grain as well as the sellers.. and for many earning the Wheat Carry is critical right now.. so that is where part of the HRW crop is parked.

Certainly those of us as producers who are facing grim prospects.. (which could turn around...???  Just need a big spring snow.. hmmm like three of them if someone upstairs is reading this...)  We are gonna hold on until we see improvement.. for as long as we can.  There are places that are pretty dire.. but there are also places where the crop is rooted in and holding on.  So... "wait and see."

As far as demand goes.. and I haven't read much about this.. but I'm told that about 40% or so of the grind at one of the local millers was flour business going to Hostess.. which is "ka-put" as of right now.. until that whole mess gets straightened out..  So yes demand is soft also.. as well as soft on exports.. thus far...

Come the first of the year.. we could see bushels come to market for tax reasons.. (maybe we are seeing some of that now before rates go up...??)  We could see the funds come back in.. (or not..)  and/or we could finally see exports pick up as the rest of the world's stocks have been cleaned out.. and/or we could see improved moisture..  So.. Something is going to give.. driving by the crops everyday.. and watching the deteroiation.. my glasses may be colored.. we are not OUT of inventory.. but golly.. right now.. "not much" hopeful about future prospects.

As we all know.. wheat has about nine lives.. for how many that we've burned through we are that much closer to the last one.. may see it.. may not...???

Now SHOULD we see some moisture and some price pressure.. THEN we might also see wheat moving back into the feed bunk...??  But probably most of the junky/feed quality stuff was cleaned out earlier.. and what is left is good quality milling grade.. so that might be a shame unless we really have improved prospects for a decent 2013 crop to replace it... 

So sit back and get some more popcorn.. there's probably a couple more twists and turns yet to be played.. on both sides of the markets.  And I didn't even enter any Fed aspects.. which.. "don't get me started.."

There ya go.. "fair and balanced."