The Times - Serving Waitsburg, Dayton and the Touchet Valley

Chicago wheat price swings have made business uncomfortable for the last 18 months, with swings ranging more than a dollar per bushel in any given 60-day period. Chicago is in the spotlight because it is the most visible, but Kansas City, Minneapolis and even Portland wheat markets are in the same whirlpool.

Making decisions about things financial, be it wheat, 401k funds, CD's, stocks or even municipal bonds has become an exercise in frustration and anxiety even for professionals. Even the isolated among us are seeing and feeling the erosion of trust and the encroachment of cynicism toward our most fundamental institutions, banks, regulators, politicians.

What or who may we rely on for illumination and direction? The answer must emerge from the same old place from which it always comes; the calm consideration what we know and what we don't know.

We know there is a surplus of wheat in the world, at least compared to several decades of history. We know that many important global buyers and institutional importers of wheat are having great difficulty with excessive debt levels or political instability that limits their ability to expand purchases. Both of these factors are not likely to decline in effect until at least several months hence.

For the Pacific Northwest, the best customers willing to pay good prices for Pacific Northwest harvests are fortunately on the Pacific Rim, where economic activity remains positive. The U.S. dollar is still viewed as the safest among few alternatives for investment.

The net of these big pieces is negative for wheat prices in general, but relatively good for Pacific Northwest producers of white wheat. The price trend is negative, but the world will not stop needing wheat.

There are broad political trends and major cyclical forces converging. European and U.S. sovereign debts are running at levels difficult to conceive, let alone manage. There are strident voices in the news warning of global currency failures ahead. There are Mayan calendar readers loudly expecting cataclysmic events to come, but where are the Mayans?

We must at least act as if the world and our system will continue to function. If in our planning for the future we postulate certain failure and collapse of our society and its key institutions, we may initiate another kind of failure, a moral failure that could at least make any other problems that emerge worse.

Certainly we can prepare ourselves for troubled times, but the very best way to do that is to pay attention to our own assessment of reality, not to the sound of the crowd.

The outlook for many markets is gloomy, and the year ahead will include newspaper headlines that may cause a quick intake of breath, but there are ways to prepare and act that allow us to focus instead on the best things in life, rather than the worst.

Gary Hofer can be reached at 509-337-8417 weekdays between 8 and 11 a.m. Pacific Time.

The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness.

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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. Past performance is not necessarily indicative of future results.