Usually in talking about the markets--and almost certainly during this time of year--the welfare of the Midwest crop areas is Point 1, 2 and 3 in the minds of traders. Tell them that the Midwest is doing OK, and you could talk 'til you're blue in the face about problems somewhere else--it won't matter. I know--I've tried many times.

Well, at least for awhile, it's different here at the end of July. Maybe it's only temporary, but for now the market seems very concerned about production loss from the drought in Russia.

And, maybe it takes this kind of problem to get things going. The drought over there is the worst in 130 years, dating back to 1880. The U.S. was well into the rapid expansion period known as the Gilded Age. And Russia was led by Tsar Alexander II. (An aside here---in March of 1881, the year after the drought, Tsar Alexander II was assassinated.)

So, perhaps this market concern is just a bow to history. But they've got it bad over there. Temperatures of 95-104 have pretty well dominated Russia for several weeks. And the dryness has been a part of the scene going back to April. Now, the heat is starting to spread west--extreme east Ukraine had over 100 Tuesday.

That westward expansion of the heat gets the trade's attention. In Russia, along with former Soviet republic Kazakhstan, the drought's worst impact was on spring wheat. I won't dare to try to talk about the market's feeling about wheat, considering that my very capable colleagues Darin, John, Bob and Pat have taken care of that assignment. But I do know this--Ukraine is revered as a breadbasket-type country, and not just for wheat--but also sunflowers and--ahem--corn. And when you start messing with the corn market, the trade sits up and takes notice.

That may very well be what we're seeing right now.

Bryce

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