Search

Search:

John Roach's DAILY GRAIN MARKETING PLAN

Overnight Trade

Dec Corn dn 1/2

Nov Beans dn 3

Dec Wheat up 5 1/2

Sell Signals

The corn and bean markets’ Sell Signals slid back down into buy territory. The green light is on to resume accumulating feed needs. There should be at least 1 and likely 2 more times to accumulate feed inventory on weakness between now and November.

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.

Market

Asia-Pacific stocks today closed higher: Japan +2.63%, China +0.69%, Taiwan +3.12%, Australia +3.08%, Singapore +0.92%, South Korea +2.97%, Bombay +0.75%. The European DJ Stoxx 50 is unchanged this morning.

Bullish grain traders have not gotten much positive news in weeks. This week FCStone came out at the high end of expectations on corn with an average yield estimate of 154.5 bushels per acre. That is up 6 bushels from last month’s USDA estimate and projects a crop of 12.197 billion bushels compared to the July USDA estimate of 11.715 billion bushels.

Informa was out yesterday and posted bigger crop estimates than FCStone. Informa estimated the corn yield at 155.4 bushels per acre and added 400,000 harvested acres to USDA’s July forecast.

FCStone’s soybean crop estimate came in at 2.993 billion bushels with a yield of 41.5 bushels per acre. This is not much different from the July USDA estimate which called for a crop of 3.0 billion bushels with a yield of 41.6 bushels per acre.

Informa estimated the bean yield at 42 bushels per acre and U.S. production at 3.054 billion bushels. Informa added 560,000 harvested acres to USDA’s estimate in July. On its July estimate USDA plugged an unusually large 2 million acre abandonment estimate to compensate for flood damage. USDA will re-estimate acreage in the August 12 Supply Demand report.

FCStone did not survey the wheat crop but Informa estimated the U.S. spring wheat production at 522 million bushels. This is actually above the USDA’s 507 projection in July despite lower weekly crop ratings. U.S. spring wheat ratings were down another 4 points in Monday night report to 56% G/E vs 69% last year with 6% harvested.

Wheat prices exploded surprisingly higher yesterday in independent strength after Egypt bought 295,000 tons of world wheat. Egypt was reported buying 175,000 tons of U.S. soft red winter wheat along with Ukraine and Russian wheat.

Right now the corn and soybean bulls have nothing stimulating them except margin calls which are stimulating them to sell. Wheat traders are being held back by the weak corn and bean trade. Welcome to a normal August market during which the season’s low in corn and beans is frequently posted.

China’s CNGOIC raised its grain crop estimates for 2008, with corn production nearly 3% above 2007 at 156 million tons, bean production over 36% above last year (and 1 million tons above last month) at 17.5 million tons.

Brazil’s crush industry association, Abiove, estimated the 2007-08 soybean crop at 60.3 million tons, down from 61.3 million tons in April, and the USDA’s 61.0 million tons July number. Feb-Jan 2008-09 exports were seen at 26 million tons down from 27.3 million tons forecast in April, but ahead of 23.8 million tons last year

A USDA attaché pegged Russian ‘08/09 wheat output at 53.5 million tons, up from 49.4 million tons a year ago, but slightly below the 54.0 million tons USDA July estimate.

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.