On Friday of this week, the USDA released several reports dealing with final crop production for �06 and ending supplies. The reports were so bug eyed bullish for corn that prices rose to their highest levels in 10 years, locking limit up. The move upward was so violent because the report was so bullish that soybean and wheat prices exploded upward with a vengeance as well. At one point, soybeans were up 49 cents and wheat 30 cents before late day profit taking pushed values off the day's best levels. For the day, it was one of the most bullish sessions in history in absence of crop problems such as hot and dry weather.

In my October 20 column I composed for this newspaper I stated, �clearly a historic battle is underway between those that need corn for food purposes and those that want it for fuel. In coming months, if ending corn stocks drop to 800 million bushels as end users battle for existing supplies, corn prices will be, �$5 or so a bushel.� The key for corn prices rests with ending stocks.� According to the USDA on Friday, ending stocks of corn are now pegged at 752 million bushels, below the 800 I mention back in October but corn prices have yet to hit $5 a bushel.

Needless to say, virtually everyone is bullish corn at this point and rightfully so. Any sort of further drop in stocks or the failure to add new acres to the �07 crop will send corn prices on a white knuckle rally that will blast thru the $5 a bushel level in a blink. The market is that bullish due to tight ending stocks.

What grain producers and traders will be facing in years ahead will be price movements similar to what was seen in the 1970's. Corn and wheat stocks are historically tight and soybean stocks, though not there yet will be there by �08. That means for at least the next three years, the price swings seen in the grain complex will be reminiscent of the �70's. In the �70's, there were no commodity funds and there was no battle going on between livestock producers that want corn for food or ethanol plants that want corn for fuel. Yet, the price movements were staggering nonetheless. Here is a small peek at what happened in �72 to �73. CORN-In Jan. �73, July corn futures were as low as $1.40 a bushel but on the next to the last trading day before the contract expired, prices closed at approx. $2.60 a bushel. On the final day of trade, prices exploded upward and closed at $3.80 a bushel, a rise of $1.20 in one final day of activity.

Wheat-In early �72, July wheat was trading as low as $1.40 but the contract expired, went off the board so at $3.50 a bushel. In the �70's it was soybean prices that were the strong link in the complex in the opening years of the decade. Today, the strong link for now is corn. But here is what soybean prices accomplished in the early �70's in Jan. �72, soybean prices traded as low as $3.15 a bushel but in early June, �73 they hit $12.90 a bushel. By mid July, a month later, they were back down to $6.40. But there is more!

From mid May of �73, soybean prices rose from $8.75 a bushel to $10.25 and the market was limit up bid for seven consecutive trading days. That was a $1.50 a bushel rise in seven sessions. Those short could not exit and those wanting to buy the market could not do so.

And the bull (old crop �73 versus new crop �74) soybean spreads expanded to historic wide ground. The spreads moved from approx. $1.25 nearby futures over the distant months to $6.50 over, a gain of $5 a bushel. The way that was accomplished was brutal: On some days, nearby soybeans were limit up while new crop limit down. That happed several days in a row and in particular during that seven day period in May, �73 when prices were limit up bid for nearby futures for a total move of $1.50 a bushel.

Mr. Collins is right. There is a bull on the lose and it's going to have major implications for agriculture and general public. Those that argue prices are about to be as volatile as they were in the �70's are also correct. All that means one thing in my view, the Era of the Speculator has returned.

If I can be of help, call me at 406-682-5010.