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John Roach's DAILY GRAIN MARKETING PLAN

Overnight Trade

Dec Corn up 3/4

Nov Beans dn 6

Dec Wheat dn 3

Sell Signals

The corn and bean meal markets’ Sell Signals are in buy territory and we have wrapped up our 2nd increment of feed buying. We want to space out our buying because there should be at least 1 and likely 2 more times to accumulate feed inventory on weakness between now and November.

We are seldom interested in selling any grain at this time of the year especially when there is not a Sell Signal. We will likely get another Sell Signal before harvest, but I wouldn’t plan on selling much on it. For years, sales made during August through November have been made at the season’s lowest priced months.

I would rather get storage lined up for all the bushels you haven’t sold and plan on making sales during March, April, May, and June on Sell Signals. March through June sales on Sell Signals have a record of being made at the highest prices of the year. We expect the spring of 2009 to be just as exciting as the spring of 2008 at least until we can be assured an adequate supply of new crop production.

USDA Reports

Traders had in their minds that today’s USDA reports would be very important. We simply had no idea how many acres were lost and how much yields had been impacted by the unusually late and wet growing season. That made all of us dependent upon the USDA numbers. And guess what, the numbers were not a surprise to the marketplace as best as I can tell. Click here to get a snapshot of the report.

Traders were looking for a bigger corn crop and the U.S. production estimate was raised by 573 million bushels. This was bigger than the pre-report trade estimates, but opening calls are for a modest 10 cent lower opening signaling that traders were ready for this large of an increase.

The U.S. bean crop was cut by 19 million bushels which was seen as positive. The biggest crop area, South America, had the Brazilian crop reduced by 1.5 million tons while the Argentine crop was increased by that same amount. Traders were not surprised by the bean numbers and the bean opening is expected to be only 10 cents higher.

The U.S. wheat crop was left unchanged but the feed usage was reduced by 35 million bushels which increased the ending stocks by 37 million bushels. The difference between those two numbers was due to rounding. Traders look for the wheat market to start unchanged.

Markets

The Russian stock market was up more than 3% and the ruble rallied 1.2% after Russian President Medvedev announced a halt in Russian military operations in Georgia. Asia-Pacific stocks today closed mostly lower: Japan -0.95%, Hong Kong -1.00%, China -0.52%, Taiwan -0.43%, Australia +0.55%, Singapore -0.30%, South Korea -0.15%, Bombay -1.88%. The European DJ Stoxx 50 this morning is trading +0.10%.

Traders are likely to use the USDA reports as a baseline with adjustments next month caused by August weather. So far August weather will go down as beneficial in most growing regions. We will hear lots of discussion about ear weights and maturity dates but the majority of users will breathe a sigh of relief after seeing today’s reports.

Since there was not a lot for traders to get excited about on the USDA reports, the outside markets will have influence on price activity in the week ahead. Look at the DJ-AIG Index, crude oil, and the U.S. Dollar Index; none are positive to the grain markets. Corn traders know that big crops get bigger but prices have already fallen sharply from their July peak and are very oversold..

In the face of all that, I think markets will rally.

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.