CROPS

On Friday Nov. 9, the Chicago wheat March contract briefly touched $9.29 per bushel. By 11 a.m. the next Tuesday, the same contract was trading actively at $8.59, 70 cents per bushel lower.

This little bit of drama came in the face of the low- est overall national winter wheat crop quality rating in the U.S. since records have been kept in 1986, with reports of good-to-excellent wheat condition assessed at just 39 percent last week and anticipated to continue to decline into the winter wheat dormancy season. The 20-year average for this rating is 60 percent good-to- excellent. Pacific Northwest winter wheat is in consid- erably better condition at this point with Washington at 75 percent good-to-excellent, Oregon at 58 percent and Idaho at 67 percent.

The now-somewhat infamous Goldman Sachs has reversed its optimistic price projections from just a month ago.

On Tuesday, Goldman dropped its three-month wheat estimate to $9.50 from October's $10.25 idea. The bank's analysts also lowered their 6-month soy- bean price prediction to $15.50 from $17.25 and three-month corn price expectations to $8.25 from $9. This is just another reflection of the range-trading at- titude that has contained wheat prices since mid-July. There is quite a bit of pent-up energy that any market acquires in such a long sideways move, so more drama is coming.

The pressure to liquidate commodity positions is at least partly from caution among large trading funds ahead of perceived problems in Washington, D.C. dealing with fiscal policy. The "Fiscal Cliff" may be entirely artificial, but it is becoming clear that the prob- lem of debt in the world, which had been on hold as the U.S. elections approached, is now re-emerging as a dominant factor and might easily override nearly all other fundamental or technical market factors. Markets do not generally like uncertainty and the wind is blow- ing on the negative side right now for wheat, but there are underlying seasonal and supply factors that may lift soybeans in particular and grains in general later.

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 ac- count. All funds committed should be risk capital.