John Roach's DAILY GRAIN MARKETING PLAN

07-14-10 Daily Grain Plan

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Travels

This morning John will appear at the Wyffels Corn Strategy program in Decatur, Illinois. A copy of his presentation is available on our website. Go to our website: http://www.roachag.com/presentations to see our latest ideas on the grain markets.

Wednesday, July 14th
Corn Strategies program – open to the public

Speakers: Mark Pearson, Dr. Steve Johnson, and Moe Russell
Registration begins at 7:30am w/ the program beginning at 8:30.
For more information http://www.wyffels.com/cornstrategies/

Thursday, July 15th
John will be speaking at the AgFest 2010 at the Clay County Regional Event Center in Spencer, IA, starting at 1:00PM

Friday, July 16th

John Roach will appear on Market to Market, the weekly journal on rural America. To learn more about this award winning show on Public TV, click this link: http://www.iptv.org/mtom/
If you are not able to see Market to Market in your area, send a letter to your local PBS station and let them know how important markets are to your business. Meanwhile, Friday’s show will be available at the link above over the weekend.

Sell Signal

It’s time to do the math of yield multiplied by price = revenue. If we could put out a Sell Signal on corn yield we would. We can debate the national number all you want but the reality is we have the 2^nd best rated crop coming and it is the middle of July. Soon to be tasseled and dented. The weather outlook remains favorable to finish the corn early in regions where we grow the most abundant supplies. Customers from Nebraska to Indiana are giving us solid improvements in their yield expectations this week versus the past month on the account of steady rains and heat. Even in loamy soils of eastern Kansas and dry land areas of western Kansas, corn with good stands has matured nicely in the past 2 weeks.

Think of a summer ride on a roller coaster. After the long climb to the top of the first big drop, everyone knows what comes next. In the grain markets, this ride started a little over 13 days ago after the June 30^th USDA report. It was our climb to the top. Maybe we are wrong and new news is around the corner but many years the big drop is just at this time of the year. Take one look at many grain charts and note how quickly the declines occur once traders realize the bullish news faucet shuts off. It is not time to raise your hands in the freefall. It is time to pick up the phone and get sales made and cover the balance of production with put options.

Do the math on your farm using your 5 year trend multiplied by today’s offer or delivered price. Your job, Mr. CEO, is to make sure you are protecting today’s revenue. Forget about looking just at price. Look at the revenue you can guarantee far above your crop insurance levels on sales made today.

Today is the 7^th day of the corn and Chicago wheat Sell Signals. It is also the 6^th day of the KC wheat Sell Signal and 4^rd day of the Minneapolis wheat Sell Signal. And finally, today is the 3^rd day of a Sell Signal in soybeans.If you have found yourself selling at harvest or paying commercial storage most years because the harvest was bigger than expected, you are using too small of yield estimates.

Markets

Money is getting cheaper and cheaper as noted by steady declining mortgage rates. Two weeks ago, 30-year mortgage rates fell to 4.69%, the lowest rate on record. That record did not last long as rates out this week are reported at 4.57% for the week ending July 8th. Adding to the theme, the U.S. Treasury sold $35 billion in 3-year notes on Monday at a yield of 1.055%, also the lowest level on record. The previous low was 1.20% in January 2009. Are we headed down a deflationary path? It would seem that printing money (Weak Dollar) and taxation (Zero job growth) are two primary levers our current administration chooses to lift our weak economy out of the hole. I don’t like it.

Canada has received more than enough rain this year. The U.S. is getting plenty and now China is seeing much needed rains over the past few days. Yesterday’s decline on the Dalian exchange says Chinese traders are taking out some weather premium. Will China have a big crop or a smallish crop requiring U.S. exports to shore up demand? It is too early to tell.

China’s National Grain and Oils Information Centre left it’s 2010 corn production estimate unchanged this month at 168 million tons, up 2.5% from last year and ahead of the USDA’s current 166 million tons. Wheat production was unchanged at 115 million tons.

The U.S. Dollar index has been under pressure for the past 24 hours. Also the Yen is under heavy selling which historically leads to money flow into the capital markets and most notably the Euro’s strength of late. Yesterday’s strength in the equity markets was fueled by better than expected corporate earnings, largely expected given the strategic focus on efficiency and return on capital efforts in companies that make things like Alcoa and Intel. Ukraine’s Ag Ministry cut its 2010 grain crop forecast to 42.2 million tons this morning, down from 45.5 million tons previously on lower wheat output due to dryness. Drought impacting the Russian grain growing regions has helped to prop up our own Kansas City and Chicago wheat futures.

Click here for an update on Corn and Bean Price Declines for July 14-31 over the past ten years.

Click Here to see the 07/12/10 State Corn Condition Report

Click here to see the 07/12/10 State Soybean Condition Report

Click Here to see the 07/12/10 State Spring Wheat Condition Report

Click here for the Weekly Export Inspections Report

Click here for the 07/09/10 Export Sales Report

Click here for the USDA US and World Grain Carryout

Click here for the USDA July Crop Production briefing to the USDA Secretary.

Click here for the USDA’s World Agricultural Outlook Board at the July Crop Production briefing to the USDA Secretary

Click here for this week’s Drought Monitor Report

Click here for the 6/30/10 State Planted Acreage Review

Click here for the 6/25/10 NASS Quarterly Hogs and Pigs Report

Click here for the May 2010 Census Crush Report

Click here for the 6/18/10 USDA Cattle on Feed Summary

Click here for Roach Ag’s view of corn’s real trend line yield

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.

Front Month Futures

July ’10 Corn	July ’10 Beans	Sep ’10 Wheat
3.66 3/4 0.00	10.29 - 1 1/2	5.49 3/4 1/2 +

New Crop

Dec ‘10 Corn	Nov ’10 Beans	July ‘11 Wheat
3.88 3/4 1 3/4+	9.59 1/4 4 3/4+	6.31 1/4 0.00

World Markets

S&P 500	1,095.34	1.54%+
Europe DJ Stoxx	2,723.15	-0.53%
Japan	9,795.24	2.71%+
Hong Kong	20,560.81	0.64%+
China	2,653.61	0.72%+
Taiwan	7,714.51	1.54%+
Australia	4,4362.40	1.87%+
Singapore	2,952.81	0.82%+
South Korea	229.27	1.38%+
Bombay	17,938.16	-0.27%
Libor	0.53	-0.06%