Scotland Sends British Pound Reeling

The British currency, the pound sterling, has collapsed in recent weeks ahead of a vote that could separate Scotland from the rest of the United Kingdom. Scotland has been joined with England for over 300 years, but recently there have been increasing calls for Scottish independence.

To decide the question, a referendum is being held on September 18, where voters will decide whether Scotland should be an independent country. As of Friday, it appeared that the Scots were evenly divided on the issue, with polls showing a near 50/50 split.

Scotland's departure would create a myriad of complications, affecting British politics, trade agreements, corporate holdings, and bank deposits. As a result, many currency traders have been selling the British pound in expectation of potential economic woes.

In the last two weeks, the prospect of an independent Scotland has increased, which has caused the pound to drop nearly six cents in value to a 10-month low beneath $1.61. It is widely expected that next week's vote will cause a significant move in the currency, creating opportunities and risks for investors.

First Cold Snap Looms

Fears of this season's first frost briefly buoyed agricultural prices early in the week as a major cold front crept downward into the upper Midwest threatening an immature corn and soybean crop.

Few corn and soybean fields have experienced crop damage this year from bad weather, insects, or plant diseases which leaves an early frost as the only threat to production at this stage of crop development. The first major frost normally hits the Corn Belt in mid-October but this year's huge corn crop is more vulnerable since it was planted later than usual. As of Friday, some reports indicated a frost line moving down into central Iowa over the weekend but potential damage is far from assured, keeping farmers and traders on edge.

Despite concerns about frost damage, the USDA is still projecting record-breaking corn and soybean crops after a summer of spectacular weather. In its newest report, released Thursday, the USDA raised its estimate of the corn crop to 14.4 billion bushels and soybeans to 3.9 billion bushels. These numbers were higher than anticipated by most analysts, which caused corn and bean prices to fall to new four-year lows. As of midday Friday, December corn was worth $3.38 per bushel, while beans traded for $9.83.