CROPS

We live in an age of "low drama." Not the high drama of large movements or of a renaissance, but more of small, inward- pointing, divisive motivations, sometimes vicious and often without discernible cause. The world seems dif- ficult and treacherous. The wheat market has reflected such a pattern since the climax of high prices driven by drought during the summer that ended in late July.

Prices have moved in sudden jumps, stops and starts in a moderate, $1 per bushel range. In the last week, Chicago wheat established the lowest price point since July 13 at $8.40 per bushel for December delivery, al- though not enough of a break to make a range failure obvious.

There is a reasonable argument for a continuation of this move downward, with export sales well behind USDA projected levels for all U.S. wheat, and a large reported speculative position on the long "bought" side and an historically large net "short" in the hands of the commercial grain trading firms. There are still drought factors, but as market-moving factors, they are muted now with the Northern hemisphere wheat harvest com- pleted. Corn and soybean harvests are also closing in ahead of schedule. The trade no longer has to guess about potential drought losses. Wheat seeding is on schedule, with emergence lagging slightly due to dry- ness, although it is not a major problem. Now we will be watching the southern hemisphere crops develop. Presently there are no crop disasters looming, but of course that will be subject to change. World exporters and importers are watching Russia for cues, although, it is fairly clear that they will slow sales for the rest of the year. The U.S. definitely has some catch-up sales to secure to achieve sales goals.

The trend is slightly negative, with the new lows put- ting pressure on "range-traders", those who like to buy the low end of a visible range and sell the high end, a style of trading that works well for as long as the range is held, but eventually the range breaks out. Then we have "drama."

Information and opinions contained herein come from sources be- lieved to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trad- ing futures and/or op- tions 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.