CROPS

The biggest news this week for the wheat market was not about the wheat market. Hurricane Sandy shut down New York markets for a couple of days, squeezing the damper down on every other market. Money decision-makers don't like to take significant actions in a half-absent market, and the money-boys do have an impact on commodity futures, including wheat, virtually every day.

Outside of outside markets, wheat has little solid footing on any new fundamental changes. The relatively tight range of prices that has contained wheat markets for the last 3.5 months now has become familiar, even routine. There is an expanding number of traders that have adapted to the regu- lar ping-pong moves of wheat prices since last July, selling the high end and buying the low. Anyone who has tried to trade futures or stocks on a short-term basis knows this is lots of fun and very profitable...until it ends suddenly. It is far too easy to become complacent in this environment. The longer the sideways run, the more violent the change will be when it comes.

The market will begin to watch the condition of the U.S. national winter wheat crop with Tuesday night's first official USDA crop rating release. Early indications are for a period of below average conditions, although this is not a strong market-moving factor at present.

We will have private analysts releasing their crop pro- duction estimates, November's USDA crop supply and demand numbers, an election and continued weird weather as market toys for the next few weeks. A recent estimate of Australian wheat production from Informa Economics (one of the better-known private grain market analysts) puts Aussie wheat harvest at 21.2 million metric tonnes, 2.3 mil- lion below their previous number and well below USDA's current figure of 23 million tonnes.

The bias for which side of the price range for wheat will be broken first remains slightly to the downside. It will be interesting when it comes.

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 trad- ing futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital.