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2002 crop: While the long term trend remains higher, the intermediate trend has turn down with USDA’s August crop report having been the climax of the summer weather market. The 10-week cyclical pattern calls for market prices to drift into a last half September low before having much of a chance to rally. Downside risk could be a move as low as $2.50 on December futures as the 10-week cycle traces out its low. Use rally days with December futures trading above $2.65 as a catch-up opportunity to get sales to 40 percent.

Fundamentals: Traders are looking for USDA to bring down their August crop estimate on the September report.

Fail-safe: Use a December futures close under $2.50 as a place to price out 20 percent of production.

Soybean Strategy

2002 crop: Price action implies the sideway to higher trend since January may be shifting to one of sideways to lower. Downside price risk in November futures could move down near $5 as prices move into the 6- to 8-week cycle low due in middle to late September. Use rally days with November futures trading above $5.40 to catch-up to 40 percent.

Fundamentals: The tight old crop inventory situation continues to offer underlying support to new crop months. Still, the fact that the crop is no longer declining, and in many areas improving, has the trade looking for USDA to increase its estimate 50 to 70 bushels on the September report.

Fail-safe: We have no fail-safe level this time.

Wheat Strategy

2002 crop: If Chicago wheat futures push to new highs, we might add to sales. Barring that, plan to carry unsold inventories deeper into the fall. Given the uncertainty, monitor the Cash Strategist Hotline for changes in strategy.

2003 crop: We are considering making an initial new-crop sale under the right circumstances. Fundamentals: Production problems continue to lift wheat prices, but with less enthusiasm than earlier in the summer. Given all of the changes that have occurred this year, there's not much left to surprise traders on the production side of the equation. On the demand side however, world trade flows are shifting, enough so, that they could be hinting export demand might fail to live up to current expectations over the coming year.

Fail-safe: We have no fail-safe at this time.