John Roach's DAILY GRAIN MARKETING PLAN

 

Our Sell Signals normally last 4-6 days, so do space out your sales starting this morning. 

 

Minneapolis wheat will be in the 2^nd day of a Sell Signal today. Kansas City wheat will be in its 4^th day and Chicago wheat will be in its 5^th day of a Sell Signal.

 

All wheat producers should be selling the percentage of 2010 crop that cannot be stored on the farm or in reasonably priced commercial storage. In areas where basis is very weak, consider the cost of commercial storage against the potential of basis improvement.

 

Corn will be in its 5^th day of a Sell Signal today.

 

At this time of the year we like to get farm cash flow cinched down. Often times when we compare the results of our Sell Signals to our customer’s sales, the opportunity to improve remains in two areas. 

 

One – making sales during Sell Signals. While everyone is talking about much higher prices and how bad the crop looks, you have to get the job done and make sales. Two – making enough sales to cover cash flow needs to the next Sell Signal. The difficulty here is making sure you deliver enough corn to cover all your bills to our spring Selling Season, starting in March of next year. Look extra hard at spring cash flow needs now.

 

We recommend selling the last increment of corn in the bin and the balance of new crop corn you want to have priced before harvest. Be sure to sell enough new crop corn to cover cash flow needs until March. You don’t want to be forced to sell at a cheap price to pay a bill you know will be due on January 1. 

 

Use this rally to buy put options on all 2010 corn you are leaving unsold. Call your Roach Ag consultant to get put options purchased.

 

Don’t let anybody (Most likely yourself but possibly some broker who thinks he or she knows what prices will be) talk you out of making some small sales on December 2011 and 2012 corn. Sell futures yourself if your cash buyer won’t offer a contract.

 

Grain prices have been supported by the already old news the USDA gave us on Friday which was the old corn crop was smaller and new crop production numbers not quite as big due to smaller corn acres. When every grain we track is in a Sell Signal in July, look around and listen for the new news to push grains higher. If you don’t read about something bullish or significant nearly every single day, count on the futures market to wash out your offer at the elevator for another penny. 

 

This afternoon’s crop ratings will be closely watched for more than normal changes in the good/excellent ratings in corn, soybeans and wheat. If you think the 163.5 bu/acre corn yield and 42.9 bu/acre soybean yields are too high, be careful. The horrible looking crops noted 30 days ago are now looking much better. Given another 30 days of growing and warm temperatures, history says they will look much better again. Only remember Iowa’s late maturing crop in 2008 and Illinois in 2009 to bring us back to what a crop’s potential can be.   

 

Steve from central Iowa commented: “John, beautiful weather here. Corn approaching 6 ft. and higher on well drained fields. I saw corn with tassels in Eastern Illinois last week. Here the flag leaf is up, so early planted corn will be pollinating over the next 2 weeks. There’s way too much old corn that needs to find a home. I had a farmer in Central Iowa tell me yesterday that he found corn in on-farm storage that heating and will soon be out of condition. Every Iowa farmer knows this was the likely outcome of not adequately drying the 2009 crop and keeping that crop in good condition”. 

 

We think today’s grain prices will be influenced higher or lower mostly by the weather. A pattern of massive rains and flooding could deteriorate the crop further but our lead forecaster is calling for normal precipitation and normal temperatures. Don’t leave the profits available today and your marketing plan up to a bullish weather forecast. Today’s U.S. and Chinese forecasts are mostly normal. Normal means yields are not going down, just a matter of how much they are tweaked higher. If prices go higher later, we surely will have more to sell whether it is old crop, new crop or pieces of 2011 and 2012.