Wheat futures set a new high for a front-month contract on Aug. 22.

Since breaking the old record, wheat has seemed to set a new record with each new trading day. This week was seemingly one of wheat's best ever with futures rising by the exchange imposed limit of 30 cents on both Tuesday and Wednesday. Supply problems seem to once again be behind the bullishness.

Australia and Argentina, two major growers in the Southern Hemisphere, both are experiencing droughts as they approach their winter wheat harvests. Australia has seen its wheat production forecast revised downward on several occasions.

This was again the case Tuesday as production was forecast at 20 million tonnes versus USDA's current estimate of 23 million tonnes. Following this bullish news were reports on Tuesday and Wednesday that both India and Egypt had tendered to purchase large amounts of wheat from both the U.S. and Russia. This was taken as very bullish news as many countries curtail their purchases when prices are at record highs.

It may be an indication of stronger than expected underlying demand or of expectations by both governments that prices could go higher in the future. Whatever the motivation, the news pushed wheat to new record highs throughout much of the week. Wheat exploded "limit up" on both Tuesday and Wednesday before selling off some on Thursday amid profit-taking. It is still too soon to tell when the wheat rally will come to a close, but if demand remains strong or weather problems persist, it could continue to push wheat prices higher.

Crude oil quietly has climbed back to near-record prices in the last week, as concerns about an active hurricane season seemed to worry traders. Forecasters from Colorado State University released a revised forecast on Tuesday that predicted six more major hurricanes this year. This came on the heels of back-to-back Category 5 hurricanes making landfall in the Caribbean. Traders seemed to be worried that an abnormally active hurricane season could result in damage to oil drilling equipment in the Gulf of Mexico. These fears seemed to show when crude climbed steadily this week.

Through midday Thursday, the October crude oil futures contract had risen $2.64 per barrel on the week, or more than 3 percent. It may take weeks or months for fears to subside as the U.S. is just now entering the middle of its hurricane season.

Gold prices rallied sharply this week as people continued to look to alternative assets in which to invest. With equity and debt markets in turmoil for several weeks now, many investors have looked to gold as a more stable asset. As such, many days that have seen large losses in equity markets have seen gains in gold futures as people sell stocks and buy gold.

This phenomenon is known as safe-haven buying and it could continue in the future if the equity and debt markets remain highly volatile. Gold rallied $25 per ounce through midday Thursday, or a little more than 3 percent. Gold is up nearly 8 percent since the middle of August, the point at which equity markets became volatile.

Walt Breitinger is vice president of commodities at A.G. Edwards and Sons. He can be reached at (219) 738-6460.