WHEAT -  What happens when 72% of the national wheat crop receives enough rain AND warm enough weather to make a great summer for farmers? Prices plunge - that's what!

When the USDA rates the crop as progressing in excellent condition, it naturally carries mixed news for farmers. December wheat futures fell 8.4 cents to $5.0920 after prices midweek reached a five month low. Prices for wheat have been slipping since the end of June due to rising global production. Adding now to the pressure is a near-perfect weather report boosting output from the fields of Minnesota and North Dakota, which claims the largest U.S. crop.

S&P 500 INDEX - A couple of weeks ago we urged readers to take profit on a bullish options spread on the September S&P. When we first placed the trade, the index was trading beneath 900 and we made a bold prediction that before the summer ended, the U.S. benchmark index might trade within a window between 975 and 1025. We continue to be astounded by the strength of this market, which continues to move higher by the day. The cash index is trading at 1012 and fuelled by spurious earnings from index members, many of whom have boosted earnings through cost-cutting measures. It can't be long before the market runs out of gas can it? We have to turn our attention at some point soon to the technical indicators for signs of a break lower. For now, we can only tease the bull.

COPPER - Despite bearish news on the Chinese economy earlier this week, investors continued to pour speculative money into copper futures after the Fed spurred demand. The Fed's Wednesday observation that the economy appears to leveling out gave investors a reason to bet that industrial production would gain. But the latest global statistic helping fan the rally for copper prices was an unexpected expansion in Eurozone output with German and French economies defying odds as analysts predicted they would continue to shrink in the second quarter. Copper for September delivery trading in New York traded at $2.93 before easing a little to settle up 90 cents per pound on the day at $2.9140. Thursday's intraday peak was the highest price for an actively traded contract in 10 months.

CANADIAN DOLLAR - Following base and precious metals' prices higher is of course the good old Canadian dollar, which rose to 92.09 (September basis) by the close of trading. Our Global resources Alert readers were first told how to buy into the Canadian dollar in July and before a surge in its strength.

The recent bullish streak for the Canadian unit ran into severe resistance lately after the finance minister hinted in no uncertain terms that currency intervention was likely as a defense mechanism against speculators seeking ill-gotten gains from riding the currency's coat tails!

The Bloomberg Base Metals Spot Price Commodity Index, a measure of aluminum, copper, nickel, lead and zinc values, rose to 189.16 today - the highest in 10 months. Analysts at RBC Capital Markets in Toronto note that the index last traded at this value before the collapse and bankruptcy of Lehman Brothers. That might be the catalyst according to the bank of the next leg up for the Canadian dollar, whose underlying economy is resource-rich and boosted by output of raw materials.

According to the Capital Markets division at the bank, the prices of base metals hold a stronger correlation with the performance of the Canadian dollar than does the price of crude oil. Here's hoping! 

Subscribers know which bond-based ETF
to buy, because they have read the August issue of
Global Resources Alert

The Supreme Council of the Secret Order of Jurojin

Tyche Research