Prolonged drought and widespread frost are quite rare events, and the combination of the two to this degree is possibly unprecedented. Rare events are inherently challenging for markets to price - I don't think you can assume perfect efficiency here.

To that end, there's still a very wide range of crop forecasts for 22/23. If Steve / Tropic Research are correct, the crop will recover and there are adequate carryover stocks to return to surplus in 23/24 without any higher prices or demand rationing required. If several of the domestic Brazilian agronomists (and others, including Judy Ganes) are correct, the market may need to ration upwards of 15mln bags of demand over the next 24 months, which hasn't happened since 1994 and required prices to rise above $5.00 in today's terms.

The difference between required demand rationing and a "skirting through" with adequate stocks scenario is what the market is digesting. It's clear from history that the market isn't priced for the former at 2.00.

Let's wait for the crop reports in December.