CROPS

I t has been a long, hot summer. The wheat markets, led by the corn and soybean markets, have reached extremes not seen since 2008.

The world markets are anxious and wary, sitting uncomfort- ably on the bench in a bad neighborhood waiting for the Euro- zone economic bus. Every story about United States corn and soybeans or Russian wheat crop disasters in the mainstream news serves to prevent wheat market participants from assessing price reality in the wheat supply and demand balance point.

U.S. spring wheat is 67 percent in the bin for this harvest with no problems. United States winter wheat harvest is 97 percent complete, again no issues. Supply is not the underlying market driver.

Although wheat prices have pulled back from their highs a month ago, the price current is tugging upward as early corn har- vest reports reveal the predicted low yields and bean producers try to pray their crops to maturity in a hot and dry season. Wheat will be the first to show weakness at the end of the seasonal move up and we are near the end of the time when the crop can still shrink. The market has anticipated much of what is happening now, so adjustments are due.

Old market clichés contain some wisdom. The one that applies here is "Buy the rumor, sell the fact." No one can pick the top, but that is not required for successful marketing or trading of wheat.

In this environment the current prices of corn at $8 per bushel and beans at $16, once only dreamed of, are not unreasonable. Global buying and selling of physical grains is not slowing down much as a result. Obviously if a grain is priced 30 percent higher than last year the buyers must dig deeper and may not be able to purchase as much, but purchase they must, as most consumption does not wait for markets to decline. For wheat, the greater price potential is on the downside, rather than upward, but the leaders are the row crops for now.

Information and opinions contained herein come from sources believed to be reliable, but are not guaranteed as to ac- curacy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital.