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John Roach's DAILY GRAIN MARKETING PLAN

Overnight Trade

May Corn dn 6

May Beans up 1/2

May Wheat dn 1 1/2

Sell Signals

Today beans will be in their 6th day of a Roach Ag Sell Signal. We want to wrap up sales on this Sell Signal. We are recommending making sales of an increment of beans in the bin and an increment of the new crop that you cannot store on the farm. We expect at least one more bean Sell Signal during our Selling Season, so calculate your sales increment accordingly.

We also want to buy November bean puts on this Sell Signal. You will find that November bean puts are very high priced as they were on the last Sell Signal. Yet the $9.00 to $12.00 strike priced bean puts purchased on the last Sell Signal increased in value from 300% to 500% when bean prices dropped.

The extended corn Sell Signal ended 4 days ago but resumed yesterday. We believe this is a continuation of the prior Sell Signal that we have already used to make sales. We expect at lease one more Sell Signal in corn and will wait until the next market peak to make additional sales.

We continue to buy corn puts to bring coverage up to ¾ of the new crop corn you plan on storing unsold.

Wheat markets are struggling in their effort to go higher. We will wait for the next Sell Signal to make additional sales.

Markets

Asia-Pacific stocks today closed mostly lower: Japan +0.58%, Hong Kong -0.25%, China -3.37%, Taiwan -0.18%, Australia -1..62%, Singapore -0.05%, South Korea +0.12%. The European DJ Stoxx 50 is up +1.78%.

After yesterday’s Export Sales Report, cumulative corn sales are up 23% from a year ago with the USDA forecasting annual exports up 17%. Loadings currently total 16% more than last year. Soybean sales are up 2% from a year ago with USDA forecasting annual exports down 4%. Loadings currently total 3% more than last year. Late season wheat export sales are up 42% from a year ago with USDA forecasting annual exports up 40%. Loadings currently total 46% more than last year. The wheat subclass breakdown is reflected in the table below.

Yesterday’s wheat market was torn between talk of Brazil looking to buy 500,000 tons of Canadian wheat to replace slowed shipments from Argentina and a less likely cold weather to threaten U.S. hard red winter areas next week. Kansas City basis values moved sharply higher yesterday.

FCStone prepared an excellent rundown on world wheat supply and demand. To read their report, click here.

The corn and bean markets seem unable to move higher or lower. Volume has slowed and weather forecasts are being watched closely by everyone. FCStone’s weather guru is expecting quite a bit of corn to be planted next week, but not every forecast agrees. And Nobody expects the corn planting progress to be close to normal on Monday or the following Monday for that matter. On the floor this morning, concern about a general commodity sell off is dominating conversations rather than weather.

Steven from Iowa said, “Grain farmers are making phenomenal profits now. They can’t go wrong if they sell corn @ $5.50 or $6.00. Could you put some effort into helping the livestock producers who actually feed the world? We are suffering while the part time farmers are getting rich. If things don’t change, we will all be eating cornbread and drinking ethanol. Any help you could give me on hog sell signals and feed purchases would be greatly appreciated.”

Sell Signals work very well in grains but they don’t work nearly as well in the meat complex. The grains have lots of people producing and lots of buyers of a storable commodity. The meats have fewer and fewer producers and fewer and fewer buyers and are not storable. Because livestock marketing is difficult we have focused our attention and writings on the grain market.

I believe we did help our livestock customers with the recent buy recommendation on corn and soybean meal which occurred near the bottom of the recent market sell off. Right now we are in Sell Signals which is the worst time to buy feed.

There is a very good (and free) daily livestock report written by Steve Meyer and Len Steiner sponsored by the CME. Their opinion is better than mine. To get on their list, go to:http://www.dailylivestockreport.com/subscribe.asp.

If any of our readers know a top-notch livestock analyst or writer, send them my way. We are currently running ads in hopes of hiring 2 top notch Agricultural Consultants and experience in livestock marketing would be an asset to us.

As you look at your farm’s sales, think about what Steven is saying above. Remember what prices were less than 2 years ago. Grain prices are multiples higher and yet nobody thinks demand will slow next year because there has been no slowdown yet this year. Although it takes a long time for livestock producers to change their plans, plans are changing with today’s grain price outlook. I caution grain farmers to not ignore the people who use their products.

Your products are wholesale inputs and require a buyer to be able to make money using them. To think that demand for grains will grow when few if any users are able to make money is a huge leap in speculative faith. Users are making their plans today for 2009 and those plans must include the highest cost of grain ever.. I don’t see many that can afford to increase their usage at even higher prices.

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.