CROPS

When the wheat market jumps 44 cents in one session, as Chicago wheat did last Friday, Sept. 28, and then turns back down 33 cents per bushel over the next couple of days, most wheat producers or owners just shake their heads and sigh.

What is the appropriate behavior when a market seems crazy? Even with all this "shake, rattle and roll" the trend has not changed. It is pretty clear that if the price of wheat climbs up to or just above $9 per bushel in Chicago (about $8.90 for white wheat), there are willing sellers waiting. By the same token, as the price sags near the $8.55 area at the CBOT (Portland white around $8.60) there is a large enough group of buyers to take up the slack. If the forces driving the market grow out of balance enough to overwhelm either the sellers at the top or the buyers at the bottom of this bracket, wheat is likely to move dramatically, perhaps as much as 80 cents per bushel in either direction.

So all the time the price is in between the edges of this now nearly three-month-old range, it becomes a noisy and treacherous stretch of rapids in the price stream.

In the background lurk significant factors that are not heavily asserting themselves just now, but that de- serve observation.

The election is dominating news and talk show time, but there is some hard fiscal work ahead. Taxes will rise and spending will be cut. It does not matter which political party is in charge. Our markets, including wheat and everything else, depend on a stable and at least somewhat predictable system in which to make decisions and plan for growth. The present volatility is a symptom of a less predictable, higher risk financial system. If our representatives and their various minions and co-conspirators (the positive sense of the words) cannot bring themselves to make the tough calls and sell the results to us, the trend in wheat (and everything else) will be negative for the next decade.

The market already knows this. If there is a reliable source of information in the world, it is still the actual markets. All of the news and information available in the world, yielding actual money decisions by real people every day, is compressed into one point: the price of wheat. Watch the trend and see reality, at least as real as it is possible to see.

Information and opinions contained herein come from sources believed to be reliable, but are not guaranteed as to accuracy 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 commit- ted should be risk capital.