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John Roach's DAILY GRAIN MARKETING PLAN

Overnight Trade

Dec Corn up 7 1/4

Nov Beans up 15

Dec Wheat up 12 1/4

Sell Signals

The corn, bean and wheat markets’ Sell Signals continue to be in buy territory with wheat up challenging the green line 20-day moving average. If you need to be buying feed for a livestock operation, now is the time to accumulate some inventory.

Last Monday we gave the green light to our brokerage customers to begin liquidating corn and bean puts and we wrapped it up by Friday. Most of the puts purchased earlier in the spring were losers, but the sharply higher cash markets in June more than offset put losses. Puts bought in the last half of June were quite profitable again this year.

I am not sure it makes sense for a grain producer to re-own sold inventory at today’s prices, but if want to buy something, look at September call options. September call options are good until August 22nd and we should know lots more about the crop by then.

Markets

Asia-Pacific stocks today closed mixed: Nikkei index +0.14%, Hong Kong -0.24%, China +0.74%, Australia -0.97%, Singapore -0.43%, South Korea -0.15%, Bombay +0.52%. The European DJ Stoxx 50 this morning is trading -0.85%.

There was lots of rain in some areas again over the weekend but forecasts are hotter and dryer this morning. With markets so far oversold, today’s forecast should give corn and bean prices a boost.

Grains are acting like they might have found a bottom. We haven’t seen any power to the upside however, except for wheat which was the market we expected to lead us up first.

Do keep an eye on the DJ-AIG Commodity Index below. This index has dropped over 15% this month with nearly every sub-component losing value. From a technical point of view, the CRB-AIG index posted record highs in July and is now below its June low. If the index ends the month of July below its June low, that would be a monthly key reversal on the chart. Monthly key reversals often signal a major top on the charts.

Most of the commodity index exchange traded funds have experienced sharp losses this month, but nobody knows if the losses are enough to shake investor confidence in the commodity markets. Will investors want to put more money into commodities now that they are “on sale” or will investors head for the door in fear?

Wheat led prices higher on Friday with talk of Iran buying up to 3 million tons of the 5 million tons they say they plan on importing. Traders thought that maybe 300-500,000 tons of U.S. wheat had been sold. The last time Iran bought big quantities was in 2001-02 crop year when they purchased a total of 5.5 million tons of world wheat.

On the other side of the wheat market Australia received some “just in time” rains helping their crop prospects.

Argentina’s Ag Secretariat reported that wheat plantings advanced to 80% as of Thursday, up 9% from last week, but still 8% behind last year. Meanwhile, rains slowed the last bit of corn harvest, as the crop was pegged at 98% harvested by Thursday, up one point on the week, and even with last year.

Government research firm Embrapa reported a sharp decrease in Brazilian soybean loss due to Asian Rust this year, as the disease reduced the crop by 418,000 tons in 2007-08, well below the estimated 2.6 million ton total in 2006-07. The strict planting window imposed by the government was cited as the main reason, along with farmers spending more on chemicals.

These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.