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John Roach's DAILY GRAIN MARKETING PLAN

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Travels

Thursday, February 25th John Roach will be working with Woofter Construction and Irrigation in Colby, Kansas. John will be speaking at the Comfort Inn Convention Center, located at exit 53 on I-70. The program begins at 3:30 PM, is free and open to the public, but you must register in advance. Please call Shannon at 785-462-7441 to reserve a seat.

Sell Signals

Beans moved back into a Sell Signal in overnight trade. We treat this as the continuation of last week’s Sell Signal. This is day number 4 of this bean Sell Signal.

Resume making soybean sales. On this Sell Signal we want to sell old crop beans out of the bin, new crop 2010 beans, and small pieces of any crop year beyond.

During our recent seminars we encouraged farmers to sell more of their 2010 crops than normal and pieces of distant years’ crops. Farmers’ largest concern voiced about making sales, was their worry about inflation.

Quite frankly we think farmers are too worried about inflation. The greater worry should be over production driving crop prices down not inflation driving inputs up. How many times in your history of farming has inflation been the reason profits have turned to losses on the farm? For many it has really happened only once…..in 2008.

We believe the bigger concern about profits on the farm should be, “I worry that strong profitability and a positive grain outlook has brought increasing amounts of capital to agricultural production around the world.” Capital investments are increasing acreage in South America and increasing yields in the former Soviet Union countries. We are headed toward surplus supplies as fast as Mother Nature will allow. Every farmer in the world is working as hard as he or she can spending more money than ever to create those surpluses.

We am not trying to get anybody to rush out and sell everything. Quite the contrary, our thought is spacing out sales over the spring Sell Signals will be the right approach this spring as it has been for the vast majority of the past 30 years. But, too many farmers are telling me they are afraid to make 2010 sales let alone anything beyond because they are so worried about inflation.

Our advice is to worry less about inflation and more about over production and lower prices. Don’t fail to get your sales made this spring.

Markets

Actively managed funds liquidated nearly all of their long futures and option positions during January and early February. Yet, for several years running, managed funds made lots of money getting long when up-trends began in the late winter. Why shouldn’t we expect them to do the same thing this year?

The grain markets’ February lows look solid and up-trends have begun. Now trends have turned solidly higher and we believe they will buy their longs back using any and all bullish factors to bet on higher prices.

Private analysts Celeres reported the 2009/10 Brazilian soybean harvest at 18% done this week, ahead of the 5 year average of 10% at the same time of year due to early harvest. Heavy rains have slowed harvest progress over the past 2 weeks which may hurt some yields in medium maturity growing regions. Forward sales of the crop reached 30% this week, up two points on the week, but 4% behind the same week last year and 14% behind the 5 year average.

Yesterdays corn export inspections were strong at 34.2 million bushels. Cumulative inspections of 756.4 million bushels are still at a rate just 13 million bushels ahead of last year with about half the marketing year gone.

Soybean inspections posted weak numbers at 35 million bushels on the week. Cumulative soybean inspections of 1.059 Billion bushels remain on record pace.

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.

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Front Month Futures

Mar ‘10 Corn

Mar ‘10 Beans

Mar ‘10 Wheat

3.70 1/4

- 1 1/4

9.62

+ 1/2

4.99

- 5 1/4

New Crop 2010

Dec ‘10 Corn

Nov ‘10 Beans

July ‘10 Wheat

4.06 1/4

- 1 3/4

9.32 1/2

- 3 1/4

5.22 3/4

- 5

World Markets

S&P 5001,108.01-0.10% Europe DJ Stoxx2,765.27-0.46% Japan10,352.10-0.47% Hong Kong20,623.00+1.21% China3,198.63-1.07% Taiwan7,597.44+0.49% Australia4,718.30+0.02% Singapore2,782.55+0.91% South Korea213.45+0.08% Bombay16,286.32+0.30% Libor0.25-0.09%

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