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John Roach's DAILY GRAIN MARKETING PLAN

Overnight Trade

Dec Corn dn 3 1/2

Nov Beans dn 25 3/4

Dec Wheat dn 2

On TV

Andy Shissler, Manager of our Chicago office was on U.S. Farm Report and will appear on Ag Day this week. Check your local listings for times and channel in your area or you can see Andy’s report at: http://www.agweb.com/MediaLauncher2.aspx?show=USFR

Sell Signals

The corn, bean and wheat markets’ Buy Signals are struggling to find their way up out of buy territory. We have wrapped up feed purchases on this Buy Signal. There should be at least 1 and likely 2 more times to accumulate inventory on weakness between now and November. But first we will wait for the Buy Signal to re-set.

What should a farmer be doing about marketing grain right now? There is no Sell Signal in any of our grains and making sales when there is no Sell Signal is usually a mistake. We will likely get another Sell Signal before harvest, but I really wouldn’t plan on selling much on it. In the past several years farmers have regretted the sales they made during August through November.

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 worked again last spring. 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.

Markets

Asia-Pacific stocks today closed lower: Japan -1.23%, Hong Kong -1.52%, China -2.38%, Taiwan -0.36%, Australia -0.33%, Singapore -1.03%, South Korea -1.92%, Bombay -0.54%. The European DJ Stoxx 50 this morning is trading -0.53%

Traders are getting ready for the FCStone crop estimate due out later today, Informa later in the week and the USDA August 12 crop report. Most traders expect the corn yield to be bigger than last month and some think they could be quite a bit bigger. The bean yield is less certain because of the lateness of the crop although you could not tell it by last night’s bean price performance. Traders expect the spring wheat estimate to get smaller while the winter wheat crop looks bigger. The August 12th USDA reports promise to be the most important in years.

Grains looked like they found a bottom until beans knifed their way to new lows last night. During the last two market sessions the bottom just seemed to fall out from under the soybean market. Maybe the bottom fell under the weight of the Argentine harvest now that Argentine farmers got the green light to ship under the previous lesser tax rate.

Argentina is expected to export 12.2 million tons of soybeans during their October 2007 to September 2008 crop year compared to 31.16 for the U.S. and 25.2 for Brazil. In addition Argentina is the largest soybean meal exporter in the world. Argentina is expected to ship 27.57 million tons of soymeal . That compares to the total world exports of 57.76 million tons. Argentine farmers might even hurry their sales knowing it will be only a matter of time before their government tries to hike soybean taxes again.

Improving U.S. crop condition ratings and good weather forecasts nearly always increase selling and that is pressing on both the corn and bean market. Everybody can see that crops are looking better in the fields along the highway and users drive those same highways.

Weak economic news continues to plague all our markets and commodities haven’t been immune. As you can see from the chart below, the DJ-AIG Commodity Index is back pressing toward lows.

Wheat led the markets higher because it finally bottomed after adjusting to its increased supply realities. Wheat acres were big and yields were good producing much bigger than normal crops in most regions of the world except for Argentina and the Middle East. Australia even looks like it will have a crop this year. As harvest rolled on, wheat prices were supported by a hungry world gobbling up the first cheap feed they could find.

Now wheat is being supported by quality issues. Much of the world wheat crop is feed quality keeping demand for milling wheat high. Crop size is now shrinking too. The Buenos Aires Grain Exchange continues to cut its wheat plantings estimate, dropping it to 4.55 million hectares this week, from 4.7 million previously. That’s now down 17% from last year, due to extended drought, rising fertilizer prices, and general problems with the government. The crop was just shy of 90% planted as of Friday, still behind last year’s 92%.

Each of the wheat classes bumped up against their green line 20-day moving averages then stalled as corn and bean prices slid lower. Market performance is very important around the green line and so far wheat prices have struggled to clear the resistance. The corn and bean markets should move up to at least their green line as well once this sell off is concluded.

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.