Policy Impacts of Drought Today's WASDE report from USDA, with its sharp cut in corn yields, is having several important tangential policy impacts:

Ethanol: Rumors of possible reductions in the ethanol mandate have been floating in Chicago, but USDA Secretary Tom Vilsack today said, "We have no plan to adjust the Renewable Fuel Standard." Note that the next major crop report from USDA likely will include a sharp reduction in harvested acres as a result of the drought. Export Embargo: The trade was incensed today over a remark by one Obama Administration official that it is "premature" to discuss a grain export embargo. By saying it is premature means that it is not out of the realm of possibility -- though that seems highly unlikely...