Grain Marketing Plans - Trading Strategies/Thoughts

USDA crop report - Rumors of China buying corn

2012-03-09T10:28:00.000-08:00

Markets are called mixed this a.m. after a crop report that manyare calling a non-event.

In the overnight session grains traded mainly higher with cornup 2, beans up about a dime, KC wheat up 2, MPLS up 4, and CBOT wheat up4. At 9:20 outside markets are mixed European wheat is up about 2% orabout 12 cents a bushel, the dollar is stronger up nearly 800 at 79.911,equities are better with the DOW up about 45 points, and crude is up about adollar.

Quick highlights of the report are US corn carryout unchanged at801 million bushels, US bean carryout unchanged at 275 million bushels, and USwheat carryout down 20 million bushels to 825 million bushels. A littledisappointing as the market was looking for cuts in the US corn and beanbalance sheets due to ideas of increased exports due to smaller South AmericanCrops. The USDA did take some of the SA crops smaller as world carry outnumbers where cut across the board for the grains.

Beans down to 57.3 MMT versus 60.28 last month, corn down to124.53 versus 125.35, and wheat down to 209.58 versus 213.1 last month.

On the surface trading just the US numbers markets are probablyweaker for corn and beans; but with the friendly world numbers perhaps we seesome two sided trading today. The price action leading up to today couldalso provide a little idea of what’s to happen; beans bulls have to be a littledisappointed while corn and wheat weakness may have the bears a little scaredas the numbers really are not super bearish.

I think when everything is said and done we will be looking outfor the end of the month crop report that will have planting intentions as wellas quarterly stocks; perhaps that leads to some choppy sideways action.

Please give us a call if there is anything we can do for you.

opening comments 2-24-12 grain markets

2012-02-24T07:29:00.001-08:00

Markets are called mixed to weaker this a.m. behind a choppyto weaker overnight session.

In the overnight session CBOT wheat was off 5-6 cents, MPLSwas down 4, KC was off 5, Corn was off 3 cents, and beans where unchanged to upa penny. At 9:15 outside markets havethe dollar under pressure down 565 at 78.257 on the cash index, equities arefirmer with the DOW up 26 points, and crude is up 60 cents.

Yesterday and today the USDA is having their Outlook Forum;this has pressure us a little bit. Manydon’t put much into these numbers; but their isn’t much else to tradeeither. The big news yesterday was wheatacreage up to 58 million a big increase from last year and from baselineprojections. This put their 2012-13ending wheat stocks at 957 million bushels, versus 887 in their baselineprojection and 845 currently.

Corn carryout is pegged at 1.616 billion bushels; more thendouble the current market year. One interestingfact is that the USDA used yields slightly above trend line yields in both cornand beans.

Beans had carryout projections for 12-13 at 205 which is acut from the current 275.

Export sales where out and all grains came in above what isneeded on a per week basis to meet current projections. Overall most where in line with tradeestimates and probably not a big market mover. China buying some corn yesterday still could lead to some support.

Basis remains defensive up front but deferred slots areshowing strength for wheat. It showsthat we don’t have anyone really looking for anything up front as we reallylack export to domestic competition for wheat right now. Corn basis is still hit and miss; many localethanol plants have good coverage and margins are a struggle.

One positive our markets have is the fact that basis isabove delivery values; one of the first times in a long time so this shouldlead to some support. Bottom line isproducers don’t have much interest moving until we see a rally. Add to that fact that spring is comingshortly and we probably don’t see basis under much pressure until producersstart moving some grain.

Please give us a call if there is anything we can do foryou.

MWC Marketing Hour Round Table

2012-02-17T18:32:00.000-08:00

I put up an interesting trade this week in our weekly mock trading session.

It was a hedge trade......well kind of

the trade was buying 2 May 6.00 Corn puts and sell 1 8.00 Dec wheat call

below is some of the thinking i had on in the agweb.com marketing old and new crop discussion thread

http://discussions.agweb.com/showthread.php?14346-Marketing-Old-Crop-and-New-Crop-2012&p=225650#post225650

-------------

one strategy that we looked at in our marketing meetings this week was selling dec wheat calls to buy may and july corn puts

based on theory that dec-dec corn-wheat spread has corn well under valued versus wheat.....so selling a call in wheat instead of corn in hopes that if it turns into a HTA corn has gained some of the 1.20 or so discount that it presently is

i think the level we used was buying 2 6.00 may corn puts and selling 1 dec 8.00 wheat call for a small credit

the reason we used may instead of july or dec is protection cost of only 14-15 cents or so; plus if market breaks i don;t think new crop breaks nearlly as hard; i think breaks or rallies will be lead by old crop corn.........so if i want to protect a price break i want to protect the area that has the most risk......in this case old crop corn

it is much more risky and tricky to manage then using the same month and same commodity but it does have some reasoning behind it

any thoughts on the trade

selling 1 dec 8.00 to 8.50 cbot wheat call to buy 2 6.00 ish may corn puts......as protection against corn.....and a sale on top side for corn

Neutral Nick Update

2012-02-17T18:17:00.000-08:00

Well it's been a couple week's since Neutral Nick jumped back on the scene; so it is about time for an update.

Below you will see some screen shots showing Nick's updates and projections; keep in mind this time nick is much more diversified into the months he has options sold and purchased. Generally he has purchased a few nearby options and sold deferred options. He also has used his idea's on where spreads go to decide how to position himself. His goal is no longer to stay 100,000 delta short. His system this time is trying to make about a million dollars in each of the grains; without huge margin exposure; watching his gamma risk and not building such a huge and unrealistic mountain if you will.

Check out his info below.

The above graph on his delta position is really one thing that needs to be managed. A couple of reasons. A) so he doesn't swing too direction bias and stays "neutral" so to speak B) So he can help control his margin cost. What is his plan to do that; take a little off the top side via near term closer to the money options that have a big gamma advantage over other options he has sold or is selling.

opening grain comments

2012-02-17T07:23:00.001-08:00

Markets are called better this a.m. behind a firmerovernight session and supportive outside markets.

In the overnight session beans where up 11-12 cents, CBOTwas up 9 cents, KC wheat was 3-4 higher, MPLS saw the front month up 3 withsome of the deferred months down 4-8 cents, old crop corn was up 5, and newcrop corn was down 1. At 8:50 outsidemarkets have European wheat up a little over 1 %, equities are slightly firmerwith the DOW up 40 points, crude oil is up about 80 cents and the US dollar isnear unchanged with the cash index at 79.283.

Yesterday it appeared as those we seen some index fundre-balancing as the deferred MPLS really took off and that helped spike up someof the KC markets where we actually seen a close higher then the electronichigh of the day. It appears in theovernight some of that got corrected as seen with front month MPLS strongerwhile deferred slots where weaker.

Basis has steady out on the MPLS spot floor as producerselling has really dried down. Basis forwinter wheat however feels very defensive and plugged up front. We really need a little export to domesticcompetition for both of the wheat markets to have a long term rally and thatseems far fetched given our world supplies that are showing record carryout’s. Along those same lines we India’s wheat cropup to 88.3 MMT; a 60 year high.

We did get some more SRW business done with Egypt in thepast day or so; a change from Russia/Black Seas and the 2^nd time ina week or so that it has happened.

The birdseed market really feels like a buyers market asdemand is very slow and it is hard to find bids that don’t run away from you.

Please give us a call if there is anything we can do foryou.

Grain Market Opening Comments 2-15-11

2012-02-15T07:23:00.001-08:00

Markets are called mixed to firmer this a.m. behind a firmerovernight session and mixed outside markets.

In the overnight session corn was unchanged to up a penny,KC wheat was up 3, MPLS wheat was up 2, CBOT wheat was up 3, and beans whereleading us once again up about 8 cents on the old crop (new crop beans where 2firmer).

At 9:00 outside markets are weaker then when the grainmarkets paused at 7:15 this a.m. with the equities slightly in the red with theDOW off 20 points, crude oil is up 75 cents a barrel which is about a dollaroff of its highs, and the US dollar is back to nearly unchanged with the cashindex at 79.560.

Not a lot of new news out there this a.m.; more cuts arebeing talked about for the South American bean crop and other logistical issueshave slowed movement and brought business back to the US. It was reported that a soy ship collided witha grain loader in a Brazil Port on Monday.

We did see 116,000 mt of beans go to China which helpssupport us again via showing business coming this way despite harvest happeningin Brazil.

Basis is a little defensive on most of the grains; we simplydon’t quiet have enough export to domestic competition. Add to that the fact that most ethanol plantsare running break even at best we don’t have a lot of reason to see massivecompetition between the two markets.

Wheat basis is even more being controlled by the domesticmarket as export’s just haven’t been happening for the hard wheat’s.

Don’t forget we have our annual meeting in Pierre tonightand this afternoon we have our MWC Marketing Hour Round Table meeting at 3:00;which is 30 mins earlier then normal.

Please give us a call if there is anything we can do foryou.

Thanks

opening comments - weekly marketing meeting time change- reminder of annual meeting

2012-02-13T07:44:00.000-08:00

Markets are called firmer this a.m. behind supportiveoutside markets and a firmer overnight session.

In the overnight session corn was up 4-5 cents, beans where7-11 higher, mpls wheat was 6-8 higher, and CBOT wheat was up 9 or so. At 9:00 outside markets are supportive withthe US dollar weaker down 250 on the cash index at 78.86, equities are firmerwith the DOW up about 60 points, and crude is up about 1.10 a barrel.

It was noted that we sold 55 TMT of US SRW off of the USEast Coast to Egypt and some of the wires I read this a.m. mentioned that wasthe first time since June.

USDA will release baseline acre numbers this a.m.; with themarket looking for about 94 million corn acres a USDA number above 95 or below93 could swing our push our markets one direction or another. These numbers are not survey or producerdriven; that won’t come until the March 31^st report which is alsoanother quarterly stocks report.

Basis has been a little defensive the past couple of days;but with the drop in the board it could stabilize soon. Bottom line is for wheat basis we really needsome export to domestic competition; today’s lead of Egypt purchasing somemight be a step in the right direction; but last weeks report that left us withan all time world record in wheat carryout should tell us that we might simplynot see the export-domestic competition needed to have an explosion in wheatbasis. The good think about the worldwheat carryout is that it doesn’t breakdown milling quality to feed quality. Ideas are that there is much more feedquality then milling quality; if that is the case we have plenty of competitionfor corn.

A couple other announcements. First don’t forget we have our AnnualMeetings this week. Tuesday in Philipand Wed in Pierre. Along with our annualmeeting on Wed we will be having our marketing meeting a little early on Wed;this week it will be from 3:00-5:00 instead of the normal 3:30 start time.

Please give us a call if there is anything we can do foryou.

Thanks

Pre-USDA Crop Report comments - projections- close grain market thoughts comments

2012-02-07T15:13:00.001-08:00

Markets closed weaker in the grains today despite outsidemarkets that turned positive.

Corn was down 2 in old crop, new crop corn was off 6 cents,old crop beans where down 1, new crop beans where up 2, KC wheat was off 7cents, MPLS wheat was off 2-3 cents, CBOT wheat was off 6 cents, crude was upabout 1.50 a barrel, metals higher, the dollar weaker with the cash index off541 at 78.527, and equities ended higher with the DOW up 33 points.

Rather quiet and somewhat disappointing day for the grains; disappointingfrom the fact that despite the outside turning around the grainsstruggled. There is a crop report out onThursday and it appears the trade is once again setting up for a bullish cropreport. (Anyone remember the January cropreport that saw us with an unchanged carryout in corn yet we traded limit downbecause the market was anticipating a cut to the carryout?)

Here are the pre-report estimates.

U.S. ending stocks 2011/12

Wheat Corn Soybeans

Average tradeestimate 0.867 0.791 0.273

Highest trade estimate 0.935 0.846 0.300

Lowest tradeestimate 0.836 0.680 0.245

USDA Januaryestimates 0.870 0.846 0.275

Global ending stocks 2011/12

Wheat Corn Soybeans

Average trade estimate 208.963 124.896 61.380

Highest tradeestimate 210.000 128.140 63.770

Lowest tradeestimate 205.000 120.000 58.000

USDA January estimates 210.020 128.140 63.430

The above estimates really should be pointing out some risk;or let down potential if we don’t see cuts like expected. The cuts being expected on the other hand dohave very sold logic behind them and I wouldn’t want to make a big bet that thereport doesn’t see cuts. After allethanol usage is ahead of pace on a weekly basis and exports have picked up andboth could allow some positive demand revisions.

Now the methodology as to how the USDA goes about itscarryout projections is up in the air and always will be kind of an unknownwith some going as far as to say that the powers to be won’t allow too tight ofa balance sheet because of higher food cost implications. Along those same lines one has to ask themselveshow much weight does the USDA put into future demand over present usagepace?

As example presently I have seen reports the past couple ofdays where ethanol margins are in the red “near record negative for moderntimes”, domestic unleaded gas demand at a 10 year low, S Plains replacement cattlecrude margins at a negative $125 a head, and prompt chicken moved to the redlast week.

So if we take our two biggest users of corn; feed usage andethanol usage and we see that many of them lose money if they buy today willeconomics allow them to keep their current pace. How will the USDA look at their numbers; thepresent pace that says we should up our exports and ethanol usage or will thelack of margin that eventually will curve demand cause the USDA to leave their numbersunchanged or maybe if put in some cuts?

Another positive that has been talked about and reflected inthe trade estimates is the world balance sheets from SA crops getting smaller;but it has also been reported for nearly a month now that weather has turnedmuch more positive. So in my opinion toassume that we get more exports my look good on paper and should happen but I don’tknow that I am in the camp that our SA crops got smaller over the past 30 days;not based on what I have read over the past 30 days. Now I would agree that the numbers we seen inthe Jan report left room for them to get smaller as they were not as small asmany thought; but I don’t know that weather really has caused a lot more damagesince the last report.

The wheat numbers; any way you shake it we still have a lotof wheat in the world; and that is assuming we end up seeing a cut in the worldstocks as expected. The only thing theUSDA has shown me over the years is that it doesn’t always stick out numbersthat are expected. Sometimes they areway off and the market gets it handed to them; sometimes the market and theUSDA numbers come in line and then they look for a new reason to trade, andother times the opposite happens and we see numbers even more drastic themarket thought would happen. At the endof the day and ahead of each report we will always be left with these unknownsand for us in the grain industry this huge risk so we really have only onelogical rational smart business decision choice. Use good risk management in your marketing witha diversified approach while look to protect against extreme price (profit orlack thereof) swings.

If you need help with some risk management ahead of the reportfeel free to give us a call. With adecent basis maybe one should simply look at making some cash sales and re-owningon paper if you are a bull.

Along those same lines don’t forget our weekly marketing meetingthat we have in Onida every Wed; including tomorrow the day before our nextreport.

A couple of other things I am seeing:

ADM closed an ethanol plant in ND or laid plans to close itin the next couple of months. (Permanentlyclose it)

Basis for grains feels a little top heavy; some ethanolplants in Iowa dropped basis by 5-8 cents today and I have seen an uptick inproducer selling. Many comments aboutwanting cash flow right around March 1^st. Wheat really lacks export demand and that iskeeping a lid on basis for winter wheat and spring wheat. Locally most ethanol plants seem to have goodFeb-March coverage and basis for corn feels defensive overall; it doesn’t helpthat they can’t lock in a margin in deferred slots. And overall it still feels like producersstill have way too much ownership (hence risk) for a rally to really make muchsteam with end users losing money when they buy some of our grains.

The sunflower market has been in a free fall; but it isstarting to feel like the panic selling is near and end. Coverage also appears to be light so perhapsif business picks up and producers get back into the field we have a chance to stabilize or bounce thatmarket over the next couple of months.

Please give us a call if there is anything we can do foryou.

Mock Trading Update

2012-02-06T14:54:00.000-08:00

last week we did add a few trades during our Mock Trading session;

I adjusted my long 6.00 march puts via selling a 6.40 march corn put

I also adjusted my short July put via the sale of a 7.00 July corn call

Other new trades that where placed include Kevin with a long soybean contract versus 2 short wheat contracts

Scott went short some CBOT wheat at 674 with a stop of 6.85 and an objective of 6.50

Duane went long 2 March Wheat with a stop at 6.55 while going short 3 March corn

Please stop in Onida this Wed if you would like to join in on the fun; as it is great for learning.

Neutral Nick is back

2012-02-06T14:44:00.000-08:00

Neutral Nick our mock trading character is back; this time with a little different rules and different game plan. Not just focused on his delta position; nor does he no longer have an unlimited checkbook. Plus he is planing on rolling things out this time; so no real end date.

Here are his trades to start off; many off of July futures; but some off of the Dec futures too.

MWC Marketing Hour Round Table Update

2012-01-27T11:28:00.000-08:00

As you know we have our weekly marketing meetings every Wed in Onida. It is open to anyone who would like to attend; we go threw charts, talk about fundamentals for our grain markets, and lastly do some mock trading. Since the start of Sept our Mock trading particpates have book about $109,671 in profits. Which is rather impressive considering the fact that most of the trades are 1 lots and most particpates make 1 trade a week if any.

We do alot of various trades; below you will find our open trades. The first section is the futures trades and the second section is the option trades. You will notice that do have alot of ratio type spread plays in the open options; which has helped in some of the above mock profits.

Please note that in the comment section you will find risk reward parameters for many of the trades as well as the person you have the open trade. We try and update and adjust every week.

Here are the Future Trades

Long	# of	Futures		Futures Price	Position	Profits (Losses)
or Short	Contracts	Symbol	Price	Last	Delta (bu)	Actual	Comment
LONG	1.00	SN2	1229.750	1241.750	5,000	$600	JORDAN
SHORT	1.00	SX2	1214.000	1221.750	(5,000)	($388)	JORDAN

LONG	1.00	WH2	656.250	653.500	5,000	($138)	jordan
SHORT	1.00	CH2	649.500	634.500	(5,000)	$750	jordan - order for 2 at even money; 1 at 7 cent wheat prem
LONG	2.00	WH2	603.000	653.500	10,000	$5,050
SHORT	2.00	CH2	603.000	634.500	(10,000)	($3,150)

LONG	1.00	WH2	659.000	653.500	5,000	($275)	KEVIN
SHORT	1.00	CH2	656.000	634.500	(5,000)	$1,075	KEVIN - RISK 2500


LONG	1.00	MWH2	876.000	823.250	5,000	($2,638)	kevin - stop $2000
SHORT	1.00	MWN2	830.250	795.250	(5,000)	$1,750	kevin


SHORT	1.00	WH2	614.000	653.500	(5,000)	($1,975)	kevin
LONG	1.00	WZ2	680.000	711.000	5,000	$1,550	kevin

LONG	1.00	WH2	614.000	653.500	5,000	$1,975	jordan
SHORT	1.00	CH2	608.000	634.500	(5,000)	($1,325)	jordan

LONG	1.00	KWN2	671.750	724.500	5,000	$2,638	kevin risk 1500
SHORT	1.00	KWZ2	709.000	754.500	(5,000)	($2,275)	kevin

LONG	1.00	MWH2	800.000	835.750	5,000	$1,788	dan - RISK 8.09 obj 8.44 1/2

SHORT	1.00	KWH2	697.000	709.000	(5,000)	($600)	DAN - RISK 7.05; OBJ 6.50

SHORT	1.00	WH2	641.250	653.500	(5,000)	($613)	MIKE AH - RISK 10 - OBJ 40 CENTS

SHORT	2.00	KWH2	697.000	709.000	(10,000)	($1,200)	KEVIN RISK 7.00 ; OBJ 6.82

LONG	1.00	MWH2	813.000	835.750	5,000	$1,138	KEVIN - ADD 2 AT 8.05; OBJ 8.30; LONG 4 7.95; RISK 7.90

Here are the Option Trades -

Long	# of	Option		Option Price	Notional		Position Equivalent				Profits (Losses)	Days to Expiration	Expiration
or Short	Contracts	Symbol	Price	Last	Position (bu)	Delta	Delta (bu)	Gamma (bu)	Theta / Day	Vega	Actual	Actual	Date
SHORT	1.00	SX1300C	49.000	65.000	(5,000)	(0.41)	(2,038)	(8)	$8	($201)	($800)	273	26-Oct-2012	jeremey
SHORT	2.00	SX1500C	31.250	25.875	(10,000)	(0.19)	(1,943)	(10)	$13	($292)	$538	273	26-Oct-2012
SHORT	1.00	SX1000P	37.000	16.250	5,000	0.13	629	(4)	$4	($111)	$1,038	273	26-Oct-2012
SHORT	1.00	SX1200P	99.500	82.500	5,000	0.42	2,077	(8)	$8	($202)	$850	273	26-Oct-2012

LONG	1.00	WH660C	47.750	22.000	5,000	0.48	2,384	32	($22)	$36	($1,288)	28	24-Feb-2012	jeremey
SHORT	1.00	WH730C	24.000	4.125	(5,000)	(0.14)	(675)	(17)	$12	($20)	$994	28	24-Feb-2012
SHORT	1.00	WH600P	22.125	5.250	5,000	0.16	806	(20)	$13	($22)	$844	28	24-Feb-2012
LONG	1.00	WH730C	0.750	4.125	5,000	0.14	675	17	($12)	$20	$169	28	24-Feb-2012

LONG	1.00	CH600C	38.500	45.000	5,000	0.73	3,650	26	($18)	$29	$325	28	24-Feb-2012	jordan
SHORT	2.00	CH700C	9.375	5.000	(10,000)	(0.16)	(1,628)	(41)	$27	($44)	$438	28	24-Feb-2012
SHORT	1.00	CH700C	8.125	5.000	(5,000)	(0.16)	(814)	(20)	$13	($22)	$156	28	24-Feb-2012
SHORT	1.00	CH575P	23.000	2.750	5,000	0.11	533	(17)	$8	($17)	$1,013	28	24-Feb-2012
SHORT	10.00	CH500P	4.500	0.125	50,000	0.01	306	(14)	$9	($17)	$2,188	28	24-Feb-2012
SHORT	1.00	CH550C	56.625	85.375	(5,000)	(0.93)	(4,626)	(6)	$6	($11)	($1,438)	28	24-Feb-2012
LONG	1.00	CH650C	13.000	16.500	5,000	0.41	2,064	33	($20)	$34	$175	28	24-Feb-2012
LONG	10.00	CH500P	4.250	0.125	(50,000)	(0.01)	(306)	14	($9)	$17	($2,063)	28	24-Feb-2012
SHORT	1.00	CH550C	47.250	85.375	(5,000)	(0.93)	(4,626)	(6)	$6	($11)	($1,906)	28	24-Feb-2012
SHORT	2.00	CH620P	45.375	11.250	10,000	0.36	3,569	(83)	$30	($66)	$3,413	28	24-Feb-2012
SHORT	2.00	CH620C	19.875	31.500	(10,000)	(0.61)	(6,130)	(63)	$41	($67)	($1,163)	28	24-Feb-2012
SHORT	5.00	CH650C	15.750	16.500	(25,000)	(0.41)	(10,320)	(167)	$101	($171)	($188)	28	24-Feb-2012
SHORT	7.00	CH580P	19.000	2.500	35,000	0.11	3,735	(134)	$54	($116)	$5,775	28	24-Feb-2012
SHORT	2.00	CH600P	23.750	6.500	10,000	0.22	2,220	(60)	$26	($53)	$1,725	28	24-Feb-2012
SHORT	4.00	CH660P	46.250	34.250	20,000	0.69	13,789	(151)	$58	($124)	$2,400	28	24-Feb-2012
SHORT	3.00	CH680P	45.875	53.000	15,000	0.76	11,396	(79)	$47	($82)	($1,069)	28	24-Feb-2012
SHORT	5.00	CH680C	18.375	8.000	(25,000)	(0.24)	(6,026)	(133)	$82	($138)	$2,594	28	24-Feb-2012
SHORT	7.00	CH600P	10.250	6.500	35,000	0.22	7,771	(211)	$91	($185)	$1,313	28	24-Feb-2012
SHORT	5.00	CH610C	18.500	41.500	(25,000)	(0.66)	(16,415)	(128)	$115	($161)	($5,750)	28	24-Feb-2012
SHORT	8.00	CH590C	20.000	54.000	(40,000)	(0.77)	(30,604)	(175)	$146	($215)	($13,600)	28	24-Feb-2012
SHORT	9.00	CH600C	28.625	45.000	(45,000)	(0.73)	(32,852)	(235)	$163	($261)	($7,369)	28	24-Feb-2012
SHORT	7.00	CH630C	15.375	25.250	(35,000)	(0.55)	(19,167)	(238)	$143	($243)	($3,456)	28	24-Feb-2012
SHORT	13.00	CH605P	18.375	6.750	65,000	0.24	15,711	(441)	$165	($359)	$7,556	28	24-Feb-2012
LONG	10.00	CH500P	0.125	0.125	(50,000)	(0.01)	(306)	14	($9)	$17	$0	28	24-Feb-2012
SHORT	10.00	CH610P	12.375	9.500	50,000	0.29	14,624	(344)	$152	($303)	$1,438	28	24-Feb-2012
SHORT	10.00	CH620P	19.875	11.250	50,000	0.36	17,847	(415)	$149	($328)	$4,313	28	24-Feb-2012
SHORT	10.00	CH630P	20.625	14.500	50,000	0.44	22,143	(468)	$148	($346)	$3,063	28	24-Feb-2012
SHORT	8.00	CH635P	21.125	21.125	40,000	0.49	19,438	(302)	$150	($279)	$0	28	24-Feb-2012



LONG	1.00	CH700C	9.375	5.000	5,000	0.16	814	20	($13)	$22	($219)	28	24-Feb-2012	jeremey
SHORT	1.00	CH600P	32.750	6.500	5,000	0.22	1,110	(30)	$13	($26)	$1,313	28	24-Feb-2012
LONG	1.00	CH550P	14.000	0.625	(5,000)	(0.03)	(157)	7	($3)	$7	($669)	28	24-Feb-2012

SHORT	1.00	CK620P	46.500	24.000	5,000	0.38	1,884	(22)	$9	($58)	$1,125	84	20-Apr-2012	kevin
LONG	2.00	CK560P	20.375	7.750	(10,000)	(0.15)	(1,537)	26	($13)	$74	($1,263)	84	20-Apr-2012

SHORT	2.00	CH570P	21.000	2.250	10,000	0.09	897	(31)	$15	($29)	$1,875	28	24-Feb-2012	scott
LONG	2.00	CH600C	28.000	45.000	10,000	0.73	7,301	52	($36)	$58	$1,700	28	24-Feb-2012
SHORT	2.00	CH650C	19.000	16.500	(10,000)	(0.41)	(4,128)	(67)	$41	($68)	$250	28	24-Feb-2012
LONG	2.00	CH570P	13.000	2.250	(10,000)	(0.09)	(897)	31	($15)	$29	($1,075)	28	24-Feb-2012
SHORT	2.00	CH700C	16.875	5.000	(10,000)	(0.16)	(1,628)	(41)	$27	($44)	$1,188	28	24-Feb-2012

SHORT	1.00	CN650C	33.000	50.000	(5,000)	(0.52)	(2,582)	(15)	$9	($80)	($850)	147	22-Jun-2012	van
SHORT	1.00	CN600P	28.500	26.500	5,000	0.31	1,565	(15)	$7	($72)	$100	147	22-Jun-2012
LONG	6.00	CH500P	5.375	0.125	(30,000)	(0.01)	(184)	8	($5)	$10	($1,575)	28	24-Feb-2012


LONG	1.00	CH540C	54.125	95.125	5,000	0.93	4,642	4	($6)	$11	$2,050	28	24-Feb-2012	kevin
SHORT	2.00	CH580C	30.125	57.875	(10,000)	(0.86)	(8,630)	(37)	$20	($38)	($2,775)	28	24-Feb-2012
LONG	1.00	CH660C	7.500	13.250	5,000	0.35	1,757	32	($20)	$33	$288	28	24-Feb-2012
LONG	1.00	CH620C	9.125	31.500	5,000	0.61	3,065	32	($20)	$34	$1,119	28	24-Feb-2012


SHORT	1.00	WN600C	66.876	94.875	(5,000)	(0.78)	(3,882)	(12)	$6	($62)	($1,400)	147	22-Jun-2012	jeremey
SHORT	1.00	WN600P	51.875	23.875	5,000	0.24	1,216	(11)	$8	($67)	$1,400	147	22-Jun-2012
SHORT	1.00	WN600P	37.375	23.875	5,000	0.24	1,216	(11)	$8	($67)	$675	147	22-Jun-2012
SHORT	1.00	WN800C	21.000	18.000	(5,000)	(0.24)	(1,205)	(11)	$7	($67)	$150	147	22-Jun-2012

SHORT	1.00	CN640P	60.625	47.500	5,000	0.44	2,217	(16)	$8	($80)	$656	147	22-Jun-2012	jeremey
LONG	1.00	CN590P	35.500	24.750	(5,000)	(0.29)	(1,436)	14	($7)	$69	($538)	147	22-Jun-2012
LONG	1.00	CN670C	41.250	39.125	5,000	0.45	2,264	15	($8)	$80	($106)	147	22-Jun-2012
SHORT	1.00	CN780C	16.375	13.500	(5,000)	(0.20)	(1,000)	(11)	$6	($58)	$144	147	22-Jun-2012

SHORT	1.00	SN1220C	82.000	81.500	(5,000)	(0.57)	(2,850)	(11)	$11	($152)	$25	147	22-Jun-2012	jeremey
SHORT	1.00	SN1100P	26.000	18.125	5,000	0.18	881	(7)	$8	($103)	$394	147	22-Jun-2012

SHORT	1.00	CN750C	24.000	18.000	(5,000)	(0.25)	(1,266)	(12)	$7	($65)	$300	147	22-Jun-2012	scott

SHORT	26.00	CN800C	6.000	11.125	(130,000)	(0.17)	(22,124)	(246)	$147	($1,359)	($6,663)	147	22-Jun-2012	jordan
LONG	10.00	CH590P	16.500	4.875	(50,000)	(0.17)	(8,589)	247	($116)	$227	($5,813)	28	24-Feb-2012

SHORT	1.00	MWH800C	27.750	40.750	(5,000)	(0.80)	(3,985)	(30)	$11	($33)	($650)	28	24-Feb-2012	kevin
LONG	3.00	MWH860C	9.000	14.500	15,000	0.36	5,414	92	($62)	$130	$825	28	24-Feb-2012
LONG	10.00	MWH1000C	0.375	0.875	50,000	0.03	1,498	44	($46)	$83	$250	28	24-Feb-2012

LONG	15.00	CH650C	4.000	16.500	75,000	0.41	30,961	501	($304)	$513	$9,375	28	24-Feb-2012	jeremey
SHORT	8.00	CH650C	14.875	16.500	(40,000)	(0.41)	(16,512)	(267)	$162	($273)	($650)	28	24-Feb-2012
SHORT	7.00	CH700C	4.625	5.000	(35,000)	(0.16)	(5,699)	(143)	$93	($153)	($131)	28	24-Feb-2012

SHORT	1.00	CN650C	28.625	50.000	(5,000)	(0.52)	(2,582)	(15)	$9	($80)	($1,069)	147	22-Jun-2012	jeremey
SHORT	1.00	CN600P	43.000	26.500	5,000	0.31	1,565	(15)	$7	($72)	$825	147	22-Jun-2012

SHORT	1.00	CN720C	24.125	24.125	(5,000)	(0.32)	(1,592)	(14)	$8	($73)	$0	147	22-Jun-2012	van
LONG	1.00	CN640P	47.500	47.500	(5,000)	(0.44)	(2,217)	16	($8)	$80	$0	147	22-Jun-2012
SHORT	1.00	CN580P	21.275	21.375	5,000	0.26	1,290	(13)	$7	($66)	($5)	147	22-Jun-2012

SHORT	1.00	CK700C	15.750	17.000	(5,000)	(0.30)	(1,497)	(18)	$10	($53)	($63)	84	20-Apr-2012	jordan
LONG	1.00	CH620P	13.875	11.250	(5,000)	(0.36)	(1,785)	42	($15)	$33	($131)	28	24-Feb-2012

LONG	7.00	CH600P	7.000	6.500	(35,000)	(0.22)	(7,771)	211	($91)	$185	($175)	28	24-Feb-2012	jeremey
SHORT	1.00	CN640P	42.250	47.500	5,000	0.44	2,217	(16)	$8	($80)	($263)	147	22-Jun-2012

Farm Direction Forward - Opening Grain Market Comments soft outside markets

2012-01-25T07:16:00.000-08:00

Below are opening comments as well as a forward from Kevin Van Trump whowill be one of the speakers for next week’s grain marketing workshop that weare sponsoring in Pierre on Feb 2^nd at the Ramkota at 10:00 a.m.; EdUsset will be the other presenter. Please give us a call or shoot us an email to RSVP for what should be agreat time.

Markets are called mixed to supportive this a.m. behind a firmerovernight session; outside markets are a little weak and most calls areslightly below where we left off the overnight session at.

In the overnight session we saw corn up 3 on the old crop while new cropwas off 2, beans unchanged to down a couple, MPLS wheat was 4 higher, KC wheat was up 3, and CBOT wheat was up5. At 9:00 outside markets have crudedown a little over a dollar a barrel, equities are weaker with the DOW down 82points, and the US dollar is firmer up 379 on the cash index at 80.247.

Not much for new news out this a.m. The rumors

on Argentina and Russia looking to limit exports are stillout there; but so far just rumors and when you look deeper into them not everyoneis convinced that it is all that bullish for Russia to have such a massivesupply.

Basis remains very firm for most of the grains but both spring wheat andwinter wheat did see spot bids take a step back yesterday. We are also very close to levels where I thinkproducer start selling plenty of corn; which could limit that or stall thatbasis rally at any time. Ethanol marginsare poor which also should limit basis strength at some point. One of the sources I read this a.m. notedethanol crush margins a negative 20-30 cents as they commented that ethanol hasonly advanced 6 cents a gallon during corn’s 40 cent or so rally. Longer term we really don’t want to seedemand slip at all; because we are probably planting a huge amount of corn andwith good weather some of the “experts” are talking we could see 160-170 typeyields with carry out numbers for next year near 1.5-2.0 billion bushels ormore.

Please give us a call if there is anything we can do for you.

Thanks

Jeremey Frost

Grain Merchandiser

Midwest Cooperatives

800-658-5535

800-658-3670

605-295-3100 (cell)

605-258-2166 (fax)

jeremey.frost@chsinc.com

www.midwestcooperatives.com

http://grainmarketingplans.blogspot.com/

This communication may contain privileged and/or confidential informationand is intended only for the use of the individual or entity to which it isaddressed. If the reader of this message is not the intendedrecipient, you are hereby notified that any unauthorized dissemination,distribution, and/or use of this communication is strictlyprohibited. This communication makes no representation or warrantyregarding the correctness of any information contained herein, or theappropriateness of any transaction for any person. Nothing herein shallbe construed as a recommendation to buy or sell any commodity contract. There is a risk of loss when trading commodity futures or options.

From: Kevin Van Trump [mailto:info@farmdirection.com]
Sent: Wednesday, January 25, 2012 7:20 AM
To: CO-Pierre, Jeremey Frost
Subject: 01/25 Farm Direction - VanTrump Report

WEDNESDAY, JANUARY 25, 2012
Printable Copy

Morning Summary: Most in the trade will be eagerly awaiting the Fed's announcement scheduled to be released today at 1:30pm CST, followed by Fed Chairman Bernanke's press conference at 3:15pm CST. As I said yesterday, "politics" seem to be trumping "fundamentals" right now so be cautious!
Ethanol now has some "politically" promising news that the market needs to digest as the White House is essentially guaranteed to be the home of a strong supporter for ethanol through 2016. If you think about it, President Barak Obama carried Iowa in 2008 by being a strong proponent of ethanol. Now with Rick Perry and John Huntsman official out of the Republican race we are now left with Newt Gingrich, Mitt Romney and Rick Santorum (the three primary winners) who are all considered certified ethanol supporters. This certainly helps ease some of the worries and concerns the funds may have had.
Argentine corn export ban rumors had the trade a little nervous yesterday. There were some "unsubstantiated" rumors circulating in the trade early yesterday in regards to Argentina possibly limiting or banning corn exports, because of their recent production setbacks. From what I have heard the Argentine government has denied all such accusations. I will keep you posted if I hear differently. It seems a little far fetched when you consider the fact the Argentine government actually has to issue export licenses for all grain leaving the country anyway. Point being, if they wanted to reduce exports, they simply wouldn't approve or issue any new licenses.
Russian export tariffs were also the topic of discussion and provided wheat with a little boost in the near-term contracts. Basically, Russia could cap exports at 2 million metric tons per month by throwing a 30% tariff on anything beyond that level. Russian insiders with "SoveCon" seem to be thinking that if exports continue at the same pace during February and March, we might see the "special" tariff regulations triggered. I am not so sure this is as bullish as some may have initially thought. Understand that to make it happen Russian exports would have to set a new record (that is not bullish). Along with this, keep in mind that an additional 7 million metric tons of wheat from the Russian State Reserves could be dumped on their domestic marketplace if wheat prices continue to push higher (which is also not bullish).
The market is definitely scary right here as it could quickly go $1 in either direction. If the weather improves and South America is able to gain ground on their second crop planting, I would suspect a break of some type is in order. On the flip side, if the weather remains hot and dry we are going to continue to add premium. With ample cash sales booked and a good floor in place, I am willing to bet a "small" portion of our 2012 production on the crop in South America getting smaller. The key word here is "small."
While I believe the market has room to work higher on South American weather, I am still concerned about the spike in planted acres here in the US. My concern is if the current weather models play out the way they are shaping up, we could be looking at an extremely early start to planting season in the Northern Corn Belt. If this ends up being the case, you have to believe the "bears" will have their day in the sun and talk of 95 million plus corn acres will be the theme...the markets will obviously feel the pain. There is certainly the question if enough corn seed will be available this early, but that is an entirely different debate. Just understand that if the market starts to focus on early US planting potential some the tides could quickly change. If this were to occur I would guess it would happen around the late Feb or early March time frame.
As "risk-managers" we have to keep our eyes further down the road. Yes, South American weather is a concern and their crop is definitely shrinking, but beyond that point the market will begin to focus on US planting intentions, where the theme seems to be "who can throw out the highest number..." I am NOT saying we will plant more than 95 million acres, but just the thought of planting more than this will weigh on the trade. Have a game plan and pull the trigger when the opportunity presents itself.
There is also now talk circulating amongst a few very influential traders that "soybeans" are starting to act a little tired. In fact, several have become openly "bearish" on thoughts of improved weather coming down pipe in South America, and lack of global "demand" type news that will be needed to stoke the bullish flames.
With the markets currently trading on "supply-side" fears, there is a sense that we may very quickly run out of "bullish" supply-side news. They make a very strong case, and honoring their years of wisdom, I am going to temporarily throttle back my bullish soybean rating. I am NOT turning bearish the trade, but simply moving back to a more "neutral/bullish" type position. We have made a great run the past several session, and I was hoping we could get to $12.50 in the November soybean contract to make some additional cash sales. Were going to need some help to get there, so keep your fingers crossed.
From a technical perspective the 100-Day moving average in March corn is now in play at around $6.45. March soybeans actually traded right up to the 100-day moving average at 12.29^4 yesterday. This puts us at a serious teetering point. The markets have failed the 100-day moving average almost every time the past several months. In fact corn hasn't closed above the 100 day-moving-average since mid-September. The takeaway is we could see heavy technical resistance ahead. If however we can muster up enough steam to bust through these areas we may see the mindset of the trend following funds quickly change to a more bullish perspective.
My gut is telling me to reduce your bullish bets and let the larger spec players battle it out. I am also concerned about so many "political" balls being in the air at this juncture. As we all know, these could easily bounce in any direction. Hopefully you have reduced your net exposure and have a chunk of your 2012 production locked in.
I know a majority of the advisors are extremely "bearish" right now, I am just not on that page. Global wheat prices are getting closer to levels where the US can compete with French and Russian wheat, therefor I am thinking we might actually see the next Egyptian tender originate out of the US. In addition, the cash corn basis is red hot and the South American crop still has many unanswered questions. China is looking to ease and QE3 here at home is not out of the question. Net-net, in my opinion there are just too many bullish cards in the deck to try and pick a short-term top in these markets. The "risk-on" theme seems to becoming back in favor, and I doubt you will get very far trying to swim upstream.
Remember who moves the markets in today's world. The traditional Ag traders of old tend to be extremely early to the party. Fund mangers have many more dials to turn and coordinates to equate before they can pull a "Crazy Ivan" type maneuver and turn their respective ship on a dime. There are many more dynamics in play than the traditional supply & demand numbers of old. Yes, eventually the market rebounds off the turnbuckle and gravitates back towards our most basic fundamentals (supply & demand), but only to be thrown in a new direction by unconventional fund type influence. Just make sure you are looking at all of the gadgets, levers and pulleys that have been installed so you do not get caught in this elaborate "mouse trap."
When I was late to practice my coach used to always tell me, "Trump...the early bird gets the worm." I used to say, but Coach "The second mouse always gets the cheese..." As you can imagine I generally had to run a little extra for my creativeness, but you have to admit I had a very good point! Keep this in mind when trading in our new found environment.
I received an interesting Trivia Question a while back in regards to the corn market that I feel is fitting for today's discussion about how much the markets have changed!
Q. During the five year period pre-2007, how many times did the corn market make a "limit" move in either direction on the day of a USDA report (and remember limits were much lower then)?
A. For those of you that guessed "zero," you were correct. Not only did the market NOT post a "limit" move, only once did it legitimately challenge limits with a $0.17 cent rally back in 2004. WOW how times have changed.
For producers the takeaway is, "if you can not take the heat get out of the kitchen." In other words, if you can not afford to be a part of the extreme volatility the funds are placing upon the marketplace, then you need to be locking in profits when they present themselves and moving to the sideline. Only take risk on the number of bushels you can comfortably hold through a $4 handle in corn, and a $10 handle in soy. It is like playing in a high-stakes poker game with $20 and the rest of the players at the table have thousands...it just never turns out very well. On the flip side, if you have the storage and your cash-flow is adequate, play the game and patiently wait for the right hand to come along.
If you are a spec, understand that it takes the funds a while to maneuver, they not only have to manage positions in corn, but often times positions in various other macro markets as well. Reallocations, Redemptions and Rebalancing are now the terms of our times. It is insanely trying to watch the traditional "fundamentals" flip-flop before our very eyes in the massive wakes the funds are creating in these waters. Patience is a must in order to stay out of their highly dangerous crosscurrents.
*As for today a bearish Q4 GDP number was released in the UK and it weighed on the European markets. In return the US dollar has seen some renewed buying and is providing a little "outside" market headwind. I would have to imagine an rally today in the grain and soy complex will be met with heavy technical resistance and some profit taking. Unless we get some new bullish data to digest, I would suspect a lower close ahead of the Fed announcement this afternoon.
*Lets not forget "Davos" kicks off today! For those who don't know, Davos is a mountain resort in Graubünden, in the eastern Alps region of Switzerland. Each year the "World Economic Forum" (WEF) host an annual meeting of global political and business elites (often referred to simply as "Davos"). The World Economic Forum (WEF) is actually a Swiss non-profit foundation, based in Geneva. It describes itself as an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. The Forum is best known for its annual meeting in Davos each year. The meeting brings together some 2,500 top business leaders, international political leaders, selected intellectuals and journalists to discuss the most pressing issues facing the world, including health, food, energy and the environment. The 2012 meeting is scheduled to run from January 25-29, with the theme "The Great Transformation: Shaping New Models." I doubt there will be much market shaking news coming from this event, but it is always interesting to hear what the world's most elite are thinking.

Northwest Tennessee - This past year was very interesting to say the least. On May 15, I rowed a boat over every acre I own that was completely under water, so you can tell we had an abnormally wet spring. At that point in time, I thought maybe a crop for this production year may be out of the question. The thing that I was fortunate on was the fact that the water didn't have real heavy currents, so there weren’t major ruts to repair. I ended up getting my corn in around mid-May and it struggled early, not looking good at all. The yields suffered terribly being lower 50 bpa taking them to 150 bpa. I did not get beans planted until August 1st and I thought about not even planting them but went ahead. The beans struggled but in the end yielded anywhere from 30 to 55 bpa with the normal average at 40 bpa. My biggest problem here lately has been the battle with the pigweed that is trying to take over and nothing seems to kill it. I love reading Kevin's report!
Central Nebraska - We are right here off the North Platte River where we get a good amount of flooding generally and last spring was no exception. However, that’s not really what causes us the most problems. It’s the hail we got to watch out for. I produce mainly white corn and a little yellow for Frito Lay and we have a pretty good deal set up with them. We will sign contracts for most of my new crop in February which gives us a good guarantee. I then still get to sell through a local buyer here and chose my delivery months and basis so it allows me some freedom on the timing of my marketing. As far as production goes, it wasn’t too bad of a year. Like I said, the wet spring made it difficult to get in the field. Once in, we had a couple storms that dropped some major hail that took probably 15 bushels off my 200 average. As you know, we are all irrigated and water is also a big issue for us. I’m blessed to farm so close to the river as many times the flooding helps the subsoil moisture on my land, but to grow 185 bushels of corn, it takes 35 wells that ran 24/7 from the beginning of June till September. Looking forward to the Marketing Seminar in Kansas City in February and meeting everybody there!
North Central Kansas - I farm dry land soybeans and winter wheat. We had 24 days over 100 degrees this summer and a down pour before and early freeze my soybean yields were well below normal with a high of 10 bushels down to 3.2 bushel per acre with an overall average of 3.86 very disappointing. A lot of the pods had shattered and the moisture measured an average of 9.72% with a test weight average of 54.82 lbs. per bushel. I’m not looking forward to mudding out the remainder of the crop but it has to be done. This was the worst crop in my 35 years farming. I’ll get ‘m next year though! Hay and corn trucks coming south from the north will keep the highways very busy. I have been blessed with some recent rains to put us at 50%-75% of annual rainfall. I need another 6"-8" of moisture to reach last year's wheat yield potential. There is very little wheat pasture for cattle. Irrigated row crop bookings, have all been short season corn or low population/full maturity for next year. No beans have been booked for next year's planting intentions. No dry land corn or dry land beans have been booked due to lack of subsoil moisture.
East Central Missouri - I farm just about an hour from your office, basically straight East of Kansas City. Corn and beans are my expertise but occasionally I throw a little wheat down in pivot corners just for sh*ts and giggles. This year heat during pollination was the culprit for most of the yield drags, but overall we made out okay. One thing I have been trying the last few years is side dressing all my corn rather than putting everything on prior. We basically go half before and half side dressing. To give you an idea we made 185 and 53 in corn and beans, compared to 200 and 60 average, so you won't hear me complain too much. It's crazy the amount of days we have seen here that have been over 50 degrees in December and January, winter has been mild to say the least. This winter has been nice but we still need a little moisture, as much as I hate to say it, a little rainy, snowy weather would be good for us. We were all geared up to push snow this winter and the tractor hasn't left the shed. About the only precipitation we have seen this year is a little rain in a lightning storm that blew through one of those days it was over 60 degrees.

Argentine agronomist Susana Merlo, a former agriculture subsecretary, is predicting a 2011/12 corn harvest of between 17 million and 18 million tonnes and a soy crop of just 39 million tons. This is insanely low, but I thought I would throw it out.
Argentine insider throwing out estimates that Soy crop could be down to 35.6 bushels per acre and Corn down to 87.5 bushels per acre.
Japan in the market looking for 300,000 tons of feed wheat.
Hearing talk that the corn basis continues to be on fire. Decatur corn is 40 over and the Memphis basis is 50 over.
Some much-needed rain is headed for Texas and the Arklatex region, but it may come at the cost of some damaging thunderstorms. It's not out of the question that a few spots could experience 4 inches of rain due to showers and storms repeating over the same area. The heavy rain is good news for those still reeling from a prolonged, severe drought. According to the U.S. Drought Monitor, more than 62% of Texas is still classified as being in a 'severe' or 'exceptional' drought.
The fellows at Goldman Sachs seem to be on the same page as Informa, thinking that corn prices will dramatically fall under pressure during the 2012 US harvest.
I have heard South American grain and soy guru "Dr. Cordonnier" has total South American corn production at 79.8 million meter tons, down 2.7% from last year, and total soybean production at 128.4 million metric tons, down 5.5% from year ago.
The Food and Agriculture Organization expects Argentina to harvest 21.4 million metric tons of corn in 2012, after early-planted crops were affected most by a heatwave during their flowering period
Oil World is on the same page reducing their Argentine soy crop by 1.5 million metric tons to 48.5. While actually raising their Brazil soybean estimates by 1 million.
USDA reporting that in 2011, US cows produced more than 22.8 billion gallons of milk, nearly 400 million more than in 2010.
Mexico's drought continues to worry the Mexican government. Talk now is that Mexico lost about 3 million acres and about 50,000 cattle last year, and the problem looks to be intensifying. There are estimates that show just in the state of Zacatecas alone some 2.5 million acres of soybeans may not be harvested this year.
Government believes Russian embargo of Brazilian meat is near the end.
Euro Zone PMI data was better than most had been anticipating, and there are now signs of more normal growth being digested by economic analyst.
There continues to be fear in the marketplace that Greece will eventually default. Many good sources now believe it will happen before this summer.
Stats from CNN showing that under current Washington administration the price of gas has jumped by 83%, ground beef by 24%, and bacon 22%....interesting!
Don't forget February Ag Options expire this Friday.
Facebook private trades supposedly halted for 3 days this week. Companies typically tend to suspend any and all trades ahead of IPO filings...
CME reporting that world investments in gold reached a record $80 billion, up more than 20% on 2010. Physical forms of investment drove this record, particularly net bar purchases at almost 1,200 metric tons up more than 33%.
Apple once again blows away earnings! Now has an estimated $100 billion in cash reserves.
Blackstone Real Estate Advisors, has formed funds to buy distressed real-estate and non-distressed properties. In fact Blackstone Group LP (BX.N) has raised more than $6 billion for a new real estate opportunity fund!

429 Bushels of Corn Per Acre!
David Hula, of Charles City, Virginia recently recorded the highest overall corn yield of 429.02 bushels per acre on a 43 acre field to win the National Corn Growers Association "Corn Yield Contest." The fact that he achieved such an outstanding yield in the wake of an extremely odd growing season makes this number even more unbelievable. The story is there was more "sunlight" than there had been in previous years and that actually helped to enhance the photosynthesis and ultimately the overall yield. Obviously, David does his homework and performs countless soil test throughout the year, and adds just the right amount of fertilizer, nutrients and applications to his crop. It is being reported that he used Pioneer® brand P2088HR to win first place in the "No-Till/Strip-Till" Irrigated category. David also admitted to trying some some new technology this year using Stoller’s "Bio-Forge" and "X-Tra Power." I also found it interesting that David was able to pull off extremely good yields in several of his fields with as little as 1 pound of nitrogen per bushel yielded. From what I am being told David actually farms fields that were first cultivated by colonist in Jamestown back in the early 1600s. The "Pamunkey" soils are considered a fine-loamy, sandy mixed soil that have been producing fantastic crops for hundreds of years. It is interesting to think that the ground you farm may have actually been where Pocahontas saved Captain John Smiths life. I should note that the top three finishers were all "irrigated," and all in the "South." This is NOT traditionally the case since most consider corn production in the south to be subject to extreme heat. What is amazing is that if you took the top three yielders in six categories: irrigated and non-irrigated, conventional till and no till/ridge till, and in both A and AA regions, the average corn yield was 313 bushels per acre. WOW! Here is link provided by "Stoller Technologies" that helps explain more about how they helped Hula increase his production:
http://www.prweb.com/releases/2012/1/prweb9106270.htm
Waterbeds for Dairy Cows???
I'm sure many of you have seen the commercials that basically imply the best milk comes from "Real California Cows." I'm guessing the Ohio Dairy Cows may NOW have a reason to disagree. I have heard talk from several in the trade that a type of "waterbed" is being placed in dairy barn stalls for the cows to lay on. From what I can gather these stalls have been modified with two water filled bladders creating a waterbed type feel for each cow. This may sound strange to those of us here at home, but I have been told there are some Europeans who have been using similar type techniques for the past 15-20 years. The claim to fame is that it helps drastically reduce the white blood cell count. The design is said to take the pressure off the front knees and rear hocks, that getting up and down and laying for long periods of time will create. Currently the US allows no more then a count of 750,000 cells per milliliter while European standards are 400,000/milliliter. There are some farmers who claim after adding the beds they have been able to cut their somatic cell count in half. I am told these water beds cost in the neighborhood of $300, and are thought to pay for themselves in about 3 years or less. When I first heard about this, I though the old boy was pulling my leg, and setting me up to be the butt of yet another farm joke. Wouldn't have ever guessed. Here is a short video I found that might help you become a believer as well.
http://www.cnn.com/video/#/video/living/2012/01/19/dnt-cows-sleep-on-waterbeds.wjw

Uranium: An Investment You May Want To Consider
Uranium stocks as of late have really been popping, and the "Global X Uranium" ETF with the symbol "URA" is up over 20% already in 2012. I am hearing some talk inside the trade that this particular ETF has a chance to double within the next 12-18 months. If you recall, Uranium took a huge hit following the Fukushima nuclear power plant disaster this past year. After the world watched the fallout from the Japanese tsunami many investors abandoned nuclear power, and in particular Uranium. This has driven Uranium stocks in many cases to 52 week lows. Obviously the press ran with the story, and jumped all over the role of nuclear energy for our future. Not once have the talking heads mentioned that reactors now being built are portable, economical and most of all safe. The two biggest players, that are counting on nuclear power for the future, are in fact China and India. I am hearing that both China and India are poised to increase uranium consumption by more than 45% in order to fuel five of the world’s largest atomic-power projects. Along with this, some believe China could be attempting to actually corner the uranium market. China continues to play the role of "smart money" aggressively acquiring uranium and uranium mines to ensure it has the fuel for its ambitious nuclear power agenda. Given the geopolitical conditions -- China certainly has incentive to build their uranium stockpile in an an aggressive fashion. Further solidifying my belief, "China’s Nuclear Energy Association" recently came out and stated it will increase atomic capacity by eightfold by 2020. In a similar note India’s Atomic Energy Commission has commented it will raise its production by as much as 13 times by 2030. The bottom-line is that the world needs nuclear power and there is no effective substitute in sight; fossil fuels are declining in availability and unpopular due to CO2 emissions, while solar and wind simply do not meet the four imperatives that energy sources must meet (which basically mean energy sources need to be cheap and scalable). I am of the belief that time heals most all wounds, therefore I would have to imagine Uranium will soon come back into favor. What might have been the worst performing ETF in 2011 now has the potential to be one of the best performing. In case you are interested "URA" is trading today at $10.55, the 52 week trading range is $7.06 to $22.42.
Will Greece Ultimately "Tap-Out" or Escape This Deadly Financial Submission Hold?
As the IMF, ECB and European debt crisis continue to be on the minds of most global investors, GREECE may be soon become the the proverbial "straw" that breaks the camels back. All eyes are starting to quickly focus on the March 20th bond repayment date. In order for Greece to make these payments and avoid a "default," talks must result in a resolution, then be confirmed prior to this drop dead date. If some type of an agreement can be manufactured, it will go a long ways towards kicking the can further down the road.
From what I am hearing, Greece needs to come up with about $18.5 million in order to meet the upcoming bond repayments that are due on March 20th. Some insiders are thinking, even if Greece is somehow able to make this round of payments it will only be a matter of time until they ultimately "default." I find myself in this camp as well, and feel that unless the EU leaders can get extremely creative a "default" is inevitable. I have listed below the most obvious outcomes:

Greece asks those who have lent them money or purchased their bonds to give them a reprieve. Essentially they will be asking the German, French and American banks to let them off the hook. For example if Greece owes someone $100 million at 10% interest, they will be wanting them to reduce the principal owed by at least 50%, and reduce the interest rate to below 5%. There are a couple of big problems with this. Not only would the banks who purchased the Greek bonds or loaned them the money have to take a huge hit, but countries like Italy, Portugal, Ireland, etc... would quickly cry foul and ask for the same type of privileges. Neither Europe nor the world could handle this kind of "default." If this somehow would be agreed upon the world would still view it as a "default." In technical terms you might be able to call it a voluntary "default" or "restructuring." In my opinion it is still a "default." Not being able to pay back a loan at the terms you agreed upon.
Greece tells the world they can no longer make the payments and will be ending the party for everyone involved. Simply stated Greece would be "bankrupt." This would initially send shockwaves through the investment world, and many banks would be rocked. I still contend however an EU balance sheet without the debt load of Greece would be a remarked improvement in the long-term. This would obviously be viewed as full fledge "default."
Greece contends they are jammed up because they can NOT print their way out this mess. Here in the US or in Japan we can simply print more money and extend the problems further and further down the road, and in many cases simply use our own currency to make the payments. Since Greece is part of the EU, the only way they could print more money would be to leave the EU. The problem is if Greece leaves the EU no one will loan them any money, and will not be willing to trade with them for many years to come. This would essentially isolate Greece from the rest of the world and leave their economy in much worse condition than it currently is in.

As you can see, there is no "good" option left on the board for Greece or for those holding Greek debt. Something completely creative and well outside our traditional thought process will need to occur for this to not end badly. The next 45-days will be interesting as Greece tries find some wiggle room in what appears to be a deadly financial submission hold. You can call it an arm-bar, guillotine, or kimura, but anyway you slice it, I am looking fro Greece to ultimately "Tap-Out."

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1937 – “The Guiding Light” debuts on NBC radio from Chicago. In 1952 it moves to CBS television, where it remains until Sept. 18, 2009. “The Guiding Light” or “GL” is an American TV soap opera that is credited by the Guinness Book of World Records as the longest running drama in TV and radio history. The show's title refers to a lamp in the study of Reverend Dr. John Ruthledge, a major character when “The Guiding Light” debuted in 1937, that family and residents could see as a sign for them to find help when needed. GL is also among the longest running broadcast programs in history of any kind, across radio media for 15 years, and then television media for 57 years, being first broadcast five days after President Franklin D. Roosevelt’s second inauguration. On April 1, 2009, CBS announced that it canceled “Guiding Light” because of low ratings. The show taped its final scenes on August 11, 2009, and its final episode aired on September 18, 2009. On October 5, 2009, CBS replaced “Guiding Light” with an hour-long revival of “Let’s Make a Deal,” hosted by Wayne Brady.
1993 – Five people are shot outside the CIA headquarters in Langley, Virginia resulting in two murders. On January 25, 1993 two CIA employees were killed and three others wounded. The perpetrator, Aimal Qazi, shot the CIA employees in their cars as they were waiting at a stoplight. Qazi was reportedly angry from watching news reports of attacks on Muslims. He had stated his motive was that he was, "angry with the policy of the U.S. government in the Middle East, particularly toward the Palestinian people." After the shooting Qazi fled the country and was placed on the FBI Ten Most Wanted Fugitives list, sparking a 4-year international manhunt. Qazi was captured by FBI agents in Pakistan in 1997 and brought back to the United States to stand trial. Qazi admitted that he shot the victims of the attack, and was subsequently found guilty of capital and first-degree murder, and was executed by lethal injection in 2002.
1996 – Billy Bailey became the last person to be hanged in the United States of America. In 1979, Bailey was assigned to the Plummer House, (a work release facility in Wilmington, Delaware), but soon escaped. He ended up at the home of his foster sister (Sue Ann Coker) and her husband (Charles Coker). Bailey and Charles Coker went on an errand in Coker's truck. Bailey asked Coker to stop at a liquor store. Bailey entered the store and robbed the clerk at gunpoint, emerging from the store with a pistol in one hand and a bottle in the other. Bailey told Coker that the police would be arriving and asked to be dropped at Lambertson's Corner, about 1.5 miles away. Once there, Bailey entered the farmhouse of Gilbert Lambertson, aged 80, and his wife, Clara Lambertson, aged 73. Bailey shot Gilbert Lambertson twice in the chest with a pistol and once in the head with the Lambertsons' shotgun. Then he shot Clara Lambertson once in the shoulder with the pistol and once each in the abdomen and neck with the shotgun, killing both victims. A Delaware State Police helicopter spotted Bailey as he ran across the Lambertsons' field. He attempted to shoot the helicopter co-pilot with the pistol and was soon arrested. Bailey was found guilty of the murders, and Bailey was sentenced to be hanged by his neck until he was dead. Although Bailey had been sentenced to hang, because the method of execution in Delaware had been changed to lethal injection, he had the option of choosing that method. Bailey refused to accept lethal injection, telling a visitor "I'm not going to let them put me to sleep." Bailey became only the third person to be hanged in the United States since 1965 (the previous 2 were Charles Rodman Campbell and Westley Allan Dodd, both in Washington) and the first hanged in Delaware in 50 years.
2004 – Opportunity Rover (MER-B) lands on the surface of Mars. MER-B is a robotic rover on the planet Mars. It has been active since 2004, and is the remaining rover in NASA’s ongoing Mars Exploration Rover Mission. MER-B was launched from Earth on July 7, 2004, three weeks after its twin, Spirit (MER-A), touched down on the other side of the planet. MER-B has continued to function effectively 30 times longer than its planned mission. MER-B has continued to perform extensive geological analysis of Martian rocks and planetary surface features. Meanwhile, its twin, MER-A, became immobile in 2009 and in 2010 ceased communications.

January 25 - The Next Fed Meeting - This one could will host a Bernanke press conference after the meeting.
January 31 - Florida Primary
February 2 - Groundhog Day: Punxsutawney Phil, the famous groundhog will make his spring prediction at daybreak. Approximately 7:25 am EST.
February 9 - USDA Crop Production Report
February 15 – 18 - National Farm Machinery Show in Louisville, KY. Come by and visit us at Booth# 404E in the North Wing.
February 16 - USDA Crop Value Annual Summary
February 19 - Greek Parliamentary Elections
February 20 - Presidents Day (Markets are Closed)
February 21 -Fat Tuesday: Marks the official start of the 2012 Mardi Gras in New Orleans, LA.
February 24 - Agri Summit 2012 Come hear Kevin Van Trump and special guests speak live in Kansas City regarding next years marketing.
February 29 - Leap Day: The extra day that occurs once every four years.

CORN MARCH 2012 CONTRACT
TECHNICAL LEVELS - NEUTRAL

• Long-Term Resistance Level #3 @ $7.49
• Intermediate Resistance Level #2 @ $7.05
• Short-Term Resistance Level #1 @ $6.66
• Previous Close $6.30^2
• Short-Term Support Level #1 @ $5.44
• Intermediate Support Level #2 @ $5.40
• Long-Term Support Level #3 @ $5.02

SOYBEANS MARCH 2012 CONTRACT TECHNICAL LEVELS - NEUTRAL

• Long-Term Resistance Level #3 @ $14.35
• Intermediate Resistance Level #2 @ $13.55
• Short-Term Resistance Level #1 @ $12.70
• Previous Close $12.22^0
• Short-Term Support Level #1 @ $10.99
• Intermediate Support Level #2 @ $9.94
• Long-Term Support Level #3 @ $ 9.18

WHEAT MARCH 2012 CONTRACT
TECHNICAL LEVELS - BEARISH

• Long-Term Resistance Level #3 @ $9.24^4
• Intermediate Resistance Level #2 @ $8.07
• Short-Term Resistance Level #1 @ $6.75
• Previous Close $6.33^4
• Short-Term Support Level #1 @ $5.41
• Intermediate SupportLevel#2 @ $5.02
• Long-Term Support Level #3 @ $4.44

CATTLE FEBRUARY 2012 CONTRACT
TECHNICAL LEVELS - BULLISH

• Long-Term Resistance Level #3 @ $130.25
• Intermediate Resistance Level #2 @ $128.10
• Short-Term Resistance Level #1 @ $126.65
• Previous Close $125.800
• Short-Term Support Level #1 @ $116.50
• Intermediate Support Level #2 @ $112.10
• Long-Term Support Level #3 @ $108.00

HOGS FEBRUARY 2012 CONTRACT
TECHNICAL LEVELS - BULLISH

• Long-Term Resistance Level #3 @ $92.50
• Intermediate Resistance Level #2 @ $89.50
• Short-Term Resistance Level #1 @ $86.80
• Previous Close $85.975
• Short-Term Support Level #1 @ $81.90
• Intermediate Support Level #2 @ $79.30
• Long-Term Support Level #3 @ $76.52

CRUDE OIL MARCH 2012 CONTRACT
TECHNICAL LEVELS - BULLISH

• Long-Term Resistance Level #3 @ $116.20
• IntermediateResistance Level #2 @ $108.50
• Short-Term Resistance Level #1 @ $105.30
• Previous Close $99.16
• Short-Term Support Level #1 @ $84.10
• Intermediate Support Level #2 @ $74.50
• Long-Term Support Level #3 @ $67.05

S&P 500 MARCH 2012 CONTRACT
TECHNICAL LEVELS - NEUTRAL

• Long-Term Resistance Level #3 @ 1,441
• Intermediate Resistance Level #2 @ 1,354
• Short-Term Resistance Level #1 @ 1,335
• Previous Close 1,311.50
• Short-Term Support Level #1 @ 1,064
• IntermediateSupport Level #2 @ 1,001
• Long-Term Support Level #3 @ 855

“I am a recent subscriber to Kevin’s newsletter, but I’m a long-time reader of many other high-profile marketing services. I am particularly impressed with the thorough manner in which Kevin evaluates every economic aspect, both nationally and internationally, that influences commodity prices. His analysis and conclusions are highly thought out and conveyed in layman’s terms so that the reader can comprehend the numerous and often complex interrelationships that impact the markets. Kevin is a real attribute to the agricultural sector.”

A.M., FDIC

“As a national federal farm policy administrator and commodity producer, I find it critical to keep updated with what is going on in the real world of agriculture and with the domestic and global markets. Of all the services I’ve have been privy to or have subscribed to over the past 20 years I’ve found in the past several months of engaging in your “Farm Direction” services to be the best perception and analysis of what is really happening in today’s world. Not only here in the United States, but across the globe as well. US farmers need this type of help and information to assist them in their daily efforts. I commend you for a job well done. Please let me know if I can ever be of any help or assistance to you in the future…”

L.T., Assistant Deputy Administrator for Farm Programs USDA

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Grain Marketing Terms

"Not To Trade, is often considered a good trading decision..."
"First Rule of HOLES: When you are in one stop digging..."
"Every looser in Vegas, always walks away from the table thinking he could have done better, the winners on the other hand leave while on top..."
"Bulls make money, Bears make money, but pigs get slaughtered..."
I'm more of a long-term player, therefore you will not see me give many short-term suggestions or trade ideas. One of my most important rules is that I always follow my long-term direction. Therefore, as long as I am "bullish" a market I will only play that particular market in one of three ways.

Option #1 - Conservatively long.
Option #2 - Aggressively long.
Option #3 - Sitting on the sideline.

I never initiate a "short" position in a
market that I am "bullish" longer-term, nor do I initiate a "long" position in a market I am "bearish" longer-term.

---

couple of corn charts - are you bullish or bearish from here?

2012-01-24T19:04:00.000-08:00

Below is a March corn chart; that shows we have made a full retracement. Will we go threw levels before the USDA report or is the recent rally just a correction in a bear market?

Grain Market Commentary - Commodity Prices Continue to move up on smaller crop estimates in South America

2012-01-24T15:33:00.001-08:00

Markets where called mixed to weaker this a.m. behind weakeroutside markets and a lower overnight session.

In the overnight session corn was down 2-3 cents, beanswhere 6-7 lower, KC wheat was off 2-3 cents, MPLS wheat was unchanged and CBOTwheat was down 2-3 cents. At 9:20outside markets have the US dollar stronger, the equities are weaker with the DOWdown 52 points, and crude is off about 60 cents a barrel.

Not much for new news this a.m.; it does appear that partsof SA now received a little more moisture then expected.

The markets did open as expected a little weaker followingthe overnight session; but within the first 5 min’s most had reversed and turnedpositive and basically kept gaining throughout most of the day. We did close a little off of our highs and MPLShad a disappointing performance but in general the grains had another positiveday as the bullish momentum continued.

Corn closed up a dime, KC wheat up 12, MPLS unchanged, beanswhere 2-3 higher, equities where weaker, dollar firmer, crude off about 75cents a barrel, and CBOT wheat up 14. MPLSspreads widened out and the spot floor was a little weaker while spread forcorn firmed up showing more signs of solid demand.

Talk was in the marketplace that Russia will be placing an exporttax on wheat; thus slowing down their wheat exports and perhaps leading to alittle business for the US. But thoserumors where denied by the government. Also rumored was Argentina placing some sort of restriction on their cornexports due the drought damage.

Basis firming, weather, and ideas that the funds want tojump on the bull bandwagon for the commodities continued to help our marketstoday. Until exports slow down we shouldfind some sort of support; but keep in mind the reason that our markets arefutures markets. They like to throwplenty of curveballs when we least expect it.

Please give us a call if we can do anything for you.

closing grain market comments Monday Jan 23rd; bull markets here we come?

2012-01-23T15:05:00.001-08:00

Markets closed firmer for the grains today behind gooddemand and weather in SA.

Beans lead the way higher up 30, KC wheat was up 7, MPLSwheat was up 5, CBOT wheat was 9 higher, corn was up 9, the US dollar was down430 points, crude up around a dollar, and the equities closed mixed with theDOW down 12 points. Overall another goodday for the grains; we opened strong last night; firmed up during the sessionearly, then backed off midsession, and when things where all said and downclosed very firm; near the highs of the day for most of the grains. Technically the picture has turned much morepositive over the past few sessions.

Export inspections at or above trade estimates as well aswhat is needed on a per week basis to meet current USDA projections helped showour recent increase in demand off of the price break. Corn came in at 35.2 million bushels, beansat 35.7, and wheat at 17.1.

Friday’s commitment of traders report showed the funds at arecord short position in CBOT wheat. Ideas are we could see some short covering that would lead the feedwheat to gain a little over our hard wheat’s. Also it has been noted that we are getting closer to exportbusiness. (About time we where wheat andUS export business in the same sentence.)

Basis in general is firmer across the board; about the onlyexception would be off quality wheat and the birdseed market. I have seen an increase in birdseed demand;but it has been more then meet with sellers; as the past month or two sellingwas non-existent.

Railroads are still performing very well and generally havecars just sitting around. Perhaps longerterm this ends up having a positive effect on some of our markets because I haveseen many asking the railroads for freight breaks to try and take product tonon-traditional outlets. The more ofthis that happens now the better the chance is that the “should be buyer” endsup having to pay more later. At leastthat is my view on how it has worked in the past. Along those same lines is we are seeing thecrush sunflower market slowly creep up towards the birdseed market. I felt that the main reason that we seen ahuge rally in the birdseed sunflower market last year was due to the fact thatso many flowers went to the crush at harvest time; way more then normal out ofour area. (that along with good soliddemand and a record snowing winter last year) I think that birdseed prices probably due struggle until the point comesthat we take some of the overwhelming supply out of the market; when that doeshappen it should really open the upside potential just because of the relativeshort crop we have in the US. Limitingthat as well as all of the grains will be the massive world supplies. Just one reason not to be afraid to sell alittle bit here and there on these little rallies.

Please give us a call if there is anything we can do foryou.

Opening Grain Market Comments - Chinese New Year

2012-01-23T07:20:00.001-08:00

Grain Markets are called better this a.m. behind a firmerovernight session and supportive outside markets.

In the overnight session corn was up 6-7 cents, KC wheat wasup 5, MPLS wheat was up 5, CBOT wheat was up 7, and beans where up 15-16cents. At 8:40 outside markets have theUS Dollar under a little pressure down 465 at 79.753 on the cash index, theequities are basis unchanged with the DOW up 4 points, and crude is up about 90cents a barrel.

Firmness in the overnight session was partially due to SAweather where they didn’t get as much rain coverage nor amount as what wasexpected over the weekend.

Basis has started to firm since the USDA report; so much sothat it has spilled over to help out the board and the spreads. Export sales have also picked up on the pricebreak and now some are talking that we could see balance sheets tighten up alittle as we move forward. I even seenone tidbit that mentioned China had bought some US corn last week. The more of this that happens that better forus longer term for our fundamentals.

Most of the Asian markets are closed this week for theChinese new years.

There is sort of a debate out there as to why basis isfirming and what is really what with our markets. The two main arguments are that A) producerssimply are not selling as they don’t need to and B) is that the product justisn’t their; that some of those that forecasted our yields much lower then theUSDA are actually correct. Either way I thinkthat the market as a whole needs to be careful not to price themselves out of themarket longer term as the world really does have plenty of supply. I think our market as a whole needs to take alittle advantage of the fact that South America is struggling to get productout.

Don’t forget about our upcoming Grain Marketing Workshopthat we are sponsoring Feb 2^nd. Also each we are still doing our weekly MWC Marketing Hour Roundtablemeetings each Wed at 3:30 in Onida in which we go threw various charts,fundamental news, option strategies, and mock trading; everyone is invited!

Please give us a call if there is anything we can do foryou.

Limit down.........BEARISH USDA Crop Report drives prices down hard on commodities...

2012-01-12T15:36:00.000-08:00

Below are closing comments as well as a forward from Country Hedgingwith a recap from today’s USDA report.

Markets closed down hard behind a bearish??? USDA report; corn lead theway with old crop down the limit of 40 cents, new crop corn was down about 22cents, beans where down 20 or so; which was a good 30 cents off of their lows,KC wheat was down 29, MPLS was off 9, CBOT wheat was off 36, crude was downover a dollar a barrel, equities ended higher with the DOW up 22 points, andthe US dollar was weaker down 503 on the cash index at 80.842.

Below is a recap of today’s report. You will notice a couple things; first the market was anticipating neutral to friendly numbers; second wegot numbers that from last month or last year where neutral for the mostpart. Year over year corn is still at adecrease in ending stocks; and even from last month we are at a decrease.

So why limit down? Because the marketwas expecting a cut of 100 million bushels and that didn’t happen. Now there seem to be a lot of holes in theUSDA’s numbers; but they are the numbers and they are what the trade will watchand follow as we go forward.

My personal view is that this report is exactly what we need if we wantto have a chance to have rallies as we go forward. So I will point out a couple of the brightspots from today’s price action and report. First off demand didn’t get hurt at all by today’s report or priceaction; as a matter of a fact I have had more feed buyers of corn call to pricecorn today then I did in a long time. Secondly the wheat acres up versus last year and versus trade estimatesgive us a chance to have an acre war as that 1 million acre increase means 1million less acres available for row crops. 3^rd the Brazil corn crop was left unchanged; perhaps leavingthe door up to future cuts and that could lead to some demand for the US atsome point. I don’t want to soundbullish as today’s report was anything but; but I do see at least a little hopethat we might be able to bounce out of this.

Now weather we do or don’t probably depends on the direction of the USDollar, the South American weather, and then in the coming months ourweather.

Please give us a call if there is anything we can do for you.

Thanks

opening grain comments a couple days ahead of USDA report Tues Jan 10th

2012-01-10T07:23:00.001-08:00

Markets are called mixed this a.m. behind a choppy mixedovernight session, pre-report trading, and supportive outside markets.

In the overnight session we saw corn unchanged, beansunchanged to down a couple, KC wheat off a couple, MPLS wheat was down 4, andCBOT wheat was down 3. At 9:00 outside markets have the DOW up nearly 100points, crude up a little over a dollar a barrel, and the US dollar in the redwith the cash index down 222 at 80.825.

A waiting game is what some are saying this a.m. as parts ofS.A. get some moisture; the market waits to see how much and how wide spreadcoverage. Forecasts are still for hot and dry after the current weatherevent.

More then the weather the market is waiting for the big USDAreport which is out on Thursday. Don’t forget that we did move our weeklymarketing meeting to this afternoon and we plan on covering the USDA report aswell as some strategies to consider heading into the report.

Here are the estimates heading into the report. Don’tforget this report will also have the final crop yield as well as winter wheatplanted.

U.S. ending stocks 2011/12

Wheat Corn Soybeans

Average trade estimate 0.842 0.749 0.233

Highest trade estimate 0.888 1.020 0.285

Lowest trade estimate 0.766 0.587 0.127

USDA December estimates 0.878 0.848 0.230

Basis is defensive and likely remains that way until we seesome sort of export to domestic competition. This goes for most of thegrains; and wheat and corn in particular. We lack the export demand andthe domestic demand is soft. For corn the domestic demand should be softif the ethanol plants are running in the red like many are saying. Wheatmills simple feel full and know that we lack export demand (competition) and wehave the rail road have one of their best performances of all time for thewinter season which just adds supply.

Please give us a call if there is anything wecan do for you

Trades ahead of the USDA Crop report - for producers hedging

2012-01-09T19:01:00.000-08:00

Producers hedging ahead of the USDA Crop report

Jeremey Frost

These strategies use corn

A couple of reasons; 1st I think that corn is king and wheat is a follower

2nd I feel that the wheat grown in our area (HRW) is cheap versus corn; so if I am hedging (protecting) I would prefer to over protect what I feel is overvalued in relationship between commodity prices

3rd corn options and CBOT wheat options are much more liquid then KC or MPLS options

4th these strategies or concepts can be used in various commodities using options as a tool so the strikes perhaps are not as important as the concepts them self

For more info on the concepts please feel free to join us for our marketing meetings as we cover some of the strategies that will follow. The next one being Tuesday Jan 10th.

Simple Marketing 101

Risk Diversifcation – are you sold where you should be?

If yes; do you feel you need to re-own should we rally? Buy a call

If you are not sold; are you protected? If NO then buy a put or make sales to get you to a comfort area.

Which calls or put’s do I buy?

That is and always will be preference; once again proper risk management probably means proper risk diversifcation. Such as buying at the money, out of the money, and a variety of time slots. Feb, March, May, July?

Really it is preference to cost and personal situation;

Myself I prefer to buy short term ones that will act like futures should I be right much quicker then the far out ones; plus if I move away from the money the cost I feel is reasonable. Especially given the price moves that have happened historically given in this report

Example of some corn options with their cost

Feb 6.50 puts – 20 cents / 6.00 puts 4 cents

Feb 6.50 calls 24 cents/ 7.00 calls 8 cents

March 7.00 calls 15 cents/6.00 puts 10 cents

July 6.00 puts 24 cents/ 7.00 calls 40 cents

Bottom line the longer and better protection you want the higher the cost

Simple trades

A) make cash sale and buy a call or a bull call spread or use a min price contract (strong basis)

B) Buy a put – (weak basis)

C) Use a strike level from previous slide that fits with your operation and time period; considering the cost/reward ratio

Other types of trades

Selling options to pay for other types of options

Such as buying a Feb call/put and selling a March or July/call or put

Sometimes creating a ceiling/sometimes buying options and selling options that are looking for same direction thus minimizing risk if one picks wrong direction

Ratio spreads; selling 1 option to pay for more then 1 option

the following trades will have margin risk; unlike the simple trades above of buying an option;

these trades as with all futures and options are risky and not suitable for most

Calendar Spread (same direction)

Purchase a 6.20 Feb put/sell a 5.70 March put (net cost aprox 3 cents)

Purchase a 7.00 Feb Call/sell a 7.50 March call ( net cost aprox 2 cents)

Purchase a 7.00 Feb call/sell a 8.50 July call (net collect aprox 4 cents)

Calendar Fences

Sell July 9.00 corn call purchase the March 6.00 put for a net cost of aprox 3 cents

Sell the July 8.00 call Purchase the 6.20 March put

Sell the July 9.50 call purchase the 6.00 Feb put

Free Ratio Calendar Spread

Sell July 6.70 call; purchase 12 to 1 ratio the 6.00 Feb Put

Sell July 7.00 call; sell July 6.00 put; purchase 7.00 Feb call/6.00 Feb put. Ratio of 5 to 1

Sell July 7.50 call; purchase 2 of the 6.30 Feb Puts

Protection –Upside – Re-ownership

Purchase July 6.30-5.30 bear put spread/sell the July 7.50 call for even money

Purchase Dec 5.50 – 4.50 bear put spread/sell the Dec 6.70 call

Light on protection, upside potential/pay to store

Sell July 8.00 call – 16 cents

Sell July 7.50 call for 25 cents

Not want complete upside risk- sell the 7.50 call and purchase 8.00 call; net collect 9 cents; but now have limited the risk;

Grain Market Commentary Jan 9th a few days before big USDA Crop Report; limit moves here we come again?

2012-01-09T16:49:00.001-08:00

Markets where called mixed behind mixed to generally firmerovernight markets and mixed outside markets.

In the overnight session most of the grains saw goodstrength with the exception of MPLS wheat which was actually weaker by 8 cents,corn was up by 8 cents, KC wheat was 8 firmer, CBOT wheat was up 11, and beanswhere up 9-10 cents. At 9:20 outside markets have the equities slightlyfirmer with the DOW up 30 points, the US dollar is weaker down 121 on the cashindex at 81.119, and crude oil is down 50 cents a barrel.

Not much for new news out there; the main thing remains theweather in South America; talk this a.m. is that there is a chance of some widespread coverage but the amount of moisture is less then what wasexpected. After the rain event it talk is then of hot and dry ridereturning.

Later in the week we will have a big USDA crop report thatlikely sets up the stages for the months to come.

We did see the markets show some strength today right fromthe get go; we then managed to consolidate breaking a little lower; as thesession pulled to an end we seen corn show a little weakness in the last 10-15while wheat and beans closed rather well. The left beans up 36cents, KC wheat up 18, MPLS wheat up 9, CBOT wheat up 17, corn up 8, equitieshad the DOW up 33 points, crude off about 25 cents a barrel, and the US Dollarslightly weaker.

Overall a good day; a little disappointing that corn slidenearly a dime off of it’s high’s but still a good day for the grains. Export shipments where out this a.m. and they where mixed; wheat coming in at10.8 million bushels; which is less the 14.2 needed on a per week basis to meetcurrent USDA projections. Corn came in at 33.9 which was above what isneeded and beans came in at 32 million which is also above what is needed.

As mentioned above the USDA report is out on Thursday anddue to that we will be moving up our weekly marketing meeting to Tuesday. We hope to go threw some strategies ahead of the report.

The average estimates for the carryout are 753 millionbushels for corn, 227 million bushels for beans, and 831 million bushels forwheat. Versus last month those numbers are all decreases in carryout;last month corn was pegged at 848 million bushels, beans at 230 millionbushels, and wheat at 831 million bushels.

The big thing that is starting to stick out in my mind isthe fact that overall the market is really looking for a bullish report; I wasrather shocked that that overall estimate average on the corn carryout is aslow as it is. I think the report has a chance to move our marketstremendously depending on how things shake out. Corn carryout comes inunder estimates limit up isn’t a stretch; nor is limit down should we see thecarryout come in at 1 billion bushels or so.

There are a couple things that lead me to think the USDAreport won’t come in super bullish is the fact that basis has been verydefensive lately and their simply is more supply then nearby demand. Plusmany ethanol plants are now running in the red; the wild card will be S.A. weatherand if that leads to increases in exports and our final yield. I haveseen some think we actually have corn yields down under 145 million bushels.

Historically this report has really been a market mover; 4out of the last 5 years I believe have been limit up or limit down.

Please give us a call if there is anything we can do foryou.

Thanks

Grain Market thoughts opening comments

2011-12-22T07:29:00.001-08:00

Markets are called steady to better this a.m. behindsupportive outside markets and a mixed overnight session.

In the overnight session corn was up a penny, beans were 2better, KC wheat was up 2, MPLS was unchanged, and CBOT wheat was alsounchanged. At 9:00 outside markets havethe equities higher with the DOW up 50 points, crude is up a dollar, and the USDollar is about unchanged.

The driving forces in the market the past week or so hasbeen dry weather in South America and parts of Ukraine/Russia. Ethanol production has been solid and somecold weather/snow in the south has helped out our demand for feed a little bit.

Export sales this a.m. were in line with expectations forbeans and wheat, while corn numbers where slightly above. Corn came in at 28.1 million bushels about 7million above what we need on a per day basis to meet current USDAprojections. Wheat sales were at 13.3million bushels which is a couple million more then we need on a per week basisto meet current projections. Beans camein at 24 million bushels which is about 10 million more then what we need on aper week basis to meet current projections.

Volume has been light and will likely remain light threw theholiday’s; short covering should be the theme as we move forward.

Technically many of our markets have done a good job ofbuilding support or support bases. Thatisn’t to say that the bottom’s are for sure in; but we have at least moved awayfrom them for the time being and the further we get away from the support zonethe more likely that the bottoms have been made. Fundamentally the January crop report couldchange how things shake out for the next several months.

A couple good things that our markets have done technicallyis the fact that most of them have moved to the highest level in a couple weeksand most have also moved past 10 and 20 day moving averages; another goodsign.

On the flip side of things we are getting close to overboughtand some of the analysts that we follow are close are have started to issuesell signals because of this. With thehuge amount of unsold inventory that producers have we have a risk of havingplenty of selling above the market.

Basis is weak across the board; but part of that is the factthat we are in holiday mode and many are already gone.

Please give us a call if there is anything we can do foryou.

Are you protecting your grain marketing risk? Closing Grain Market Comments for Tuesday

2011-12-13T15:33:00.001-08:00

Markets closed firmer today.

Corn was up ½ on the nearby, NC 2012 corn was up 7 cents, beanswhere up 7 cents, KC wheat was up 4, MPLS wheat was up 6-7, CBOT wheat was up6, the US dollar is firmer with the cash index up 730 at 80.310, crude was up acouple dollars a barrel, equities where weaker with the DOW off 67 pointsnearly 200 off of it’s highs.

Overall another decent day for the grains, thedisappointment was we made our highs in the first few minutes of trading formost of the grains. But we also managedto hold yesterday’s and Friday’s low’s while closing higher for all of thegrains.

As for new news for the grains today was another dull day;dryness in South America was noted once again; Egypt bought 180 tmt of wheat;but once again none of it was US wheat and there Ukrainian announced that theywould have an additional 2 mmt of grain to export (so much for the dry concerns)

Basis remains on the weaker side of things; but not due toheavy producer selling more so due to a lack of competition and freight/logisticsnot having their typical seasonal struggle.

Technically I thought holding the lows like we have the pastcouple of days sets up the stage that we might be trying to form some sort ofbottom on the charts. I hope it isn’tjust my hope; because fundamentally we have plenty of grain in the world.

As for marketing I like being patient in hopes that thiswill be the start of some sort of rally; but over the next several days, weeks,and months there is just huge downside risk. In the form of outside markets, big world supplies, and just ECON 101(the high prices we have had over the past year indicate that we will grow more(weather permitted) and curve demand which we can see by our lack of exportsand our export basis versus last year). How ugly things could get should a perfect storm hit with acres, yield(weather), along with outside markets and growing world supplies, should theoutside markets and economies of the world take another set back is so scary itis unreal. To think that there is norisk at the prices can’t go down from these levels is just not true. Hopefully they do hold and hopefully thefuture black swan events are positive to our prices; but they don’t have to be;nor do our prices even have to be at levels that allow one to beprofitable. Keep this in mind when youare doing your risk management, risk diversification, and overall grainmarketing plans. The worst thing aboutselling at profitable levels is you could have sold for more if you would haveheld up if we go up.

Don’t forget we have our marketing meeting in Onida tomorrowat 3:30; it usually lasts until 5:30 as we will go over some charts and do somemock trading. We hope to see you then!

Thanks

Closing Grain Market Comments

2011-12-12T15:30:00.000-08:00

Markets closed mixed today despite the very weak outsidemarkets.

Corn closed unchanged, beans were up 5-6 cents, KC wheat wasoff 9 cents, MPLS wheat was off 4 cents, CBOT wheat was off 2 cents, equitieshad the DOW off 163 points, crude was about a dollar and a half lower, and theUS dollar is 900 firmer with the Dec dollar at 79.590.

Given the outside markets today’s price action for thegrains wasn’t the worst in the world; given the negative report on Friday andthe negative outside markets today I thought the price action was good forbeans, MPLS wheat, corn, and CBOT wheat. KC wheat was a little negative; but it did at least hold Friday’slows. You know they say a trendingmarket is one that makes new lows or highs for the move; and at least for todaythe weakest of our grains didn’t do that.

As for other positive news out there; it is lacking. Dry weather concerns in South American andwet weather concerns that might possibly leading to quality issues for Australia’swheat crop where noted today; but overall markets are rather quiet and seem tobe in holiday mode.

Basis is defensive for wheat as we simply have too muchsupply for the demand we have out there. The winter we have had so far hasn’t helped basis out or slowed supplynor freight either. Typically winterbasis rallies happen due to supply slowing because producers can’t move productor the railroads are not able to move trains. I am not so sure that this hasn’t been the best winter (so far) that wehave seen in terms of rail cars at our locations.

Export inspections where out this a.m. wheat came in at 16.5million bushels which is about 44 million bushels behind last year’s cumulativeexports due date. It is was slightlyabove the 14.8 million bushels that we need per week to meet the currentprojections. One positive that wheatshould have going for it is the fact that with the cut in exports we probablydon’t have much of a risk in not hitting the present export numberprojected.

Beans came in at 29.7 versus the 22.1 that we need on a perweek basis; the scary number is the nearly 200 million bushels we are alreadybehind last year’s at this time.

Corn came in at 35.7 million bushels which was also ahead ofthe 30.6 that we need on a per week basis to meet present projections. Versus last year we are about 55 millionbushels behind.

The next big known news will not be until the Jan cropreport; keep in mind that report has really help set the price stages forseveral months the past couple of years. Anyone remember the 2008 report in which we saw spring wheat shoot uptowards $25 quickly after? Or the 2009or 2010 report in which we saw corn limit down as the numbers came in bigger thanexpected. Last year it was the reportthat saw limit up and set the stages for us to continue the rally we startedback in July of 2010.

I would encourage one to have a solid marketing plan inplace ahead of that report; which might mean having some sort of protection inplace for those that are undersold.

Please give us a call if there is anything we can do foryou.

Don’t forget we are still offering free delayedprice for wheat

USDA Crop Report Dec 9th

2011-12-09T08:35:00.001-08:00

Markets are called weaker this a.m. behind an overallbearish USDA report. One that was very negative our world fundamentals.

In the overnight session we seen grains mixed with corn up apenny or two and wheat off a couple pennies. Calls this a.m. range from5-30 lower on most of the grains.

Here is a recap of the report.

USCarryover

Friday Nov

2011-12 2011-12

estimate estimate

Corn 0.848 0.843

Wheat 0.878 0.828

Soybeans 0.230 0.195

Soyoil 2.280 2.080

Soymeal 300,000 300,000

Rice 37.5 37.5

Cotton 3.50 3.80

USDAWorld Carryover

Friday Nov

2011-12 2011-12

estimate estimate

Wheat 208.5 202.6

Corn 127.2 121.6

Rice 99.51 100.57

Soybeans 64.5 63.6

Soymeal 8.28 8.75

Soyoil 2.64 2.41

Cotton 57.7 55.0

USDAWorld Grain Production

Friday Nov

2011-12 2011-12

estimate estimate

Chinacorn 191.8 184.5

SouthAfrica corn 12.5 12.5

Argentinacorn 29.0 29.0

Australiawheat 28.3 26.0

Argentinawheat 14.5 13.0

EU27 wheat 137.5 137.5

Canadawheat 25.3 24.2

Chinawheat 117.9 117.0

Russiawheat 56.0 56.0

Ukrainewheat 22.0 22.0

Brazilsoybeans 75.0 75.0

Argentinasoybeans 52.0 52.0

Chinasoybeans 13.5 14.0

The biggest negative is probably the wheat carryout for theUS going up 50 million bushels as exports where decreased by 50 millionbushels. Versus estimates by the industry ahead of the report we seencorn at 848 million bushel carryout versus a 830 ish average trade estimate,beans at 230 verus about 215 avg guess, and wheat at 878 versus about 830 onaverage.

The positive I see on the report despite all of the veryweak opening calls is the fact that many of these numbers where expected. China raised it’s corn estimate earlier this week, Stats Canada had raisedtheir estimate, and even the Australian wheat crop was pegged bigger this week. So personally I am not going to jump all over the very weak opening calls thatsome have indicated; I think the news could quickly become old or in a sensewas already old going into the report.

Outside markets are firmer at 9:20 and they could add alittle support.

The one thing that this report should continue to tell us isthe fact that our S & D is overall bearish for the grains, it is increasingyear over year and has really increased versus the tightest we have seenearlier in the past year or so.

Please give us a call if there is anything we can do foryou.

Thanks

day ahead of Dec USDA report - closing grain market comments

2011-12-08T15:38:00.001-08:00

Markets closed mixed on the eve of another USDA Supply andDemand report that will be out Friday December 9^th.

At the end of the day we saw corn close down 8 cents, beansup 1-2, KC wheat off 3, MPLS wheat off 2, the Sept/Dec 2012 contracts in MPLSwhere down 10-12 cents, CBOT wheat was off 4, crude was off a little over 2.00a barrel, equities ended in the red with the DOW down 199 points, and the USdollar is up about 300 with the cash index at 78.812.

Overall not a bad day for the grains with us able to closewell off of their lows despite the weakness seen in the outside markets.

Here are the estimates for tomorrow’s crop report.

U.S. ending stocks 2011/12

Wheat Corn Soybeans

Average trade estimate 0.830 0.831 0.214

Highest trade estimate 0.867 0.899 0.255

Lowest trade estimate 0.731 0.712 0.165

USDA November estimate 0.828 0.843 0.195

Basis is a little defensive on most of the commodities as welack demand and seem to have producer movement a little heavier then normal dueto a nice winter (so far). Railroads areperforming well and supply is simply outweighing the demand due to a lack ofexport-domestic competition.

The feel in the markets is a little better then it was acouple days ago; and today’s technical price action in corn indicates that wemight be trying to form a bottom on the charts. In the last three days we have had a key bullish key reversal and thentoday we had an outside bullish day. Perhaps something we can build on? I guess tomorrow’s USDA report will likely be the catalysts that ends uppushing us higher or leads to head fakes or bull traps.

The birdseed industry appears to be super slow; very slow inapplications and bids are not easily found. Coverage or lack thereof is one thing that we do have going for us. Most buyers in most of the industries havevery little coverage and are hand to mouth. On the flip side of that most producers have more inventory un-pricedthen ever before. Could become a cat andmouse type of poker game on basis because of this. For the producers to eventually win we willreally need some export competition to show up.

Please give us a call if there is anything we can do foryou.

grain market comments dec 6th

2011-12-06T15:30:00.001-08:00

Markets where called weaker this a.m. behind a weakovernight markets that saw corn break major support.

In the overnight session corn was down 9 cents, beans wereoff 4 cents, KC wheat was 6 cents lower, MPLS wheat was off 6, and CBOT wheatwas 7 lower. At 9:20 outside marketshave the equities slightly positive with the DOW up 35 points while crude andthe US dollar are about unchanged.

The markets then opened up a little weaker then where theovernight session left off; but as the day moved on we slowly gained ground andfound our markets positive when all was said and done. We left a bullish key reversal on the corncharts (a key reversal would be making a new high or low for a move and thenreversing and closing the opposite) in today’s price action we saw the March corncontract get to its lowest level since last March and then we managed toreverse the day closing up 5-6 cents or about 17 cents off of its lows.

Besides corn closing up 5-6 we seen new crop 2012 corn up 2,beans up 3, KC wheat up 3-4, MPLS wheat up 1, and CBOT wheat up 1-2 cents. Outside markets have the dollar nearunchanged with the cash index at 78.519, crude also was near unchangedpresently Jan is trading about 101 a barrel, and the equities closed firmerwith the DOW up 52 points.

Overall a decent day for the grains; nice to see the marketsturnaround from the lows put in early in the session. Perhaps some of the bad news that we haveseen recently is finally build into the prices? (China corn crop bigger, South American crops bigger, Australian wheatcrop bigger, blenders tax credit ending, massive world supplies that seem toget bigger daily, etc)

I guess only time will tell if some of the recent bearishnessthat has surrounded our markets has lost it bang so to speak and selling hasbecome exhausted.

Later this week we will have a USDA report; ideas are forthe corn carryout to show little changes, beans to see a small increase incarryout, and wheat to see little changes. Overall estimates are 845 million bushels for the corn carryout versus843 million last month, beans 211 versus 195, and wheat 830 versus 828.

Overall bias is for a slightly weaker USDA S & D report dueto weak demand. Perhaps at some pointthe recent price break helps out that demand but as of now we really are notseeing super great export demand; perhaps due to the big crops from ourcompetitors. The risk is that see ourcompetitors continue to act like Wal-Mart so to speak in that no matter howcheap we try to sell grain for they are sitting there with so much supply thatthey will sell it lower. Eventually thatshould end and perhaps with the Ukraine wheat crop getting projected lower itis sooner than later.

Basis is a little defensive as many producers have done agood job locking some of it in and we simply lack export to domesticcompetition for most all of our grains.

Quality concerns have been talked about with the Australianwheat crop; but all that really does is create even more competition for our cornvia more feed wheat.

Don’t forget that tomorrow we will have another MWCMarketing Hour Round Table where we will go over some charts and do some mocktrading.

Also we are still offering free delayed price for bothwinter wheat and spring wheat.

Thanks

Trade Update - Mock Trading

2011-11-28T14:56:00.001-08:00

With a recent losing streak hitting some of our Mock trades; I am deciding to lift a profitable short position that I have on in MPLS Wheat; I am short and will lock in some profits.

Technically to me it appears that maybe the 8.00 level will hold as support; so on my scale MPLS trade I am going to get out of the 8.38 short for a little over 22 cents profit.

On the line of support holding I am going to place a buy order in at 8.15 for 1 contract, 2 at 8.10, and 3 at 8.05; with a risk to 7.95.

I will leave in my sell orders at 8.45 for 2 contracts and 8.55 for 4 with a risk of 8.63

Another update with the options expiring last week we did see Jordan pick up a short Dec corn position. He owned both the 6.40 call and put for about 50 cents; so net he is now short 1 at 5.90

It does look like Dan locked in another winner as he had a short MPLS position that he saw his objective hit so he locked in about 800 profit on that trade.

Grain Markets Comments 11-28-11 - Strong Black Friday Weekend leads to strength in Equities and spill over into commodities

2011-11-28T09:09:00.001-08:00

Grain Markets are called firmer this morning behind strongoutside markets.

In the overnight session corn was up 12, beans where up 14,KC wheat was up 14, MPLS wheat was up 9, and CBOT wheat was up 10. At 9:15 outside markets are very firm withthe DOW up over 300 points behind a very good Black Friday Weekend and someoptimism in Europe, crude is up about 2.50 a barrel, and the US dollar isgetting smacked with the cash index down 754 at 78.929.

The big thing this a.m. is the outside markets as there is notmuch for grain news out there. We haveextremely over sold markets that are and have been due for a bounce and todayit looks like we should get one; at least to start off with.

Basis is still on the firm side; but with last week being ashort week there seemed to be slightly more sellers then buyers. The strength or weakness will probably bedetermined by movement from producer and freight; but things should be a littlethin to start off the week after the long holiday weekend.

The one thing that I have noticed that has changed is theamount in the bull and bear camp. Itseems like most every advisory service that I listen to, watch, or read hasmoved into the bear camp. I hope that isshowing some fear selling as that could give us a chance to bounce out of thisor find at least find a level where the selling stops.

Longer term I see both the bullish and bearish things thatare out there which makes decisions tough. First off the world has plenty of grain and we are not seeing much inthe terms of exports plus we have very shaky outside markets. On the friendly side of things we do need toget plenty of acre’s in most our grains next year as the US balance sheets areon the tight side and the world isn’t exactly getting smaller. I do have to wonder what could happen to ourprices should we get tons of acres next year along with good yields. I have seen some balance sheet projects thathave a corn carryout over 2 billion bushels. Bottom line there will continue to be upside potential but also hugedownside risk when marketing.

If you need help with a marketing plan please give us acall.

Don’t forget that the Ag Horizon’s will have some decentmeetings that cover risk management. Mark Gold with Top Third will be there and he is one of the advisoryservices that I try to listen to on a daily basis. Also this a.m. I received an update from EdUsset’s blog; showing his updated 2012 marketing plans. Make sure to check it out

http://www.cffm.umn.edu/GrainMarketing/Pubs/GrainMarketingPlans/Corn2012Pre-Harvest.pdf

http://www.cffm.umn.edu/GrainMarketing/marketingplans.aspx

http://edsworld.wordpress.com

Ed Usset along with Kevin Van Trump will be presenting at agrain marketing meeting that we are sponsoring in early February.

Thanks

Opening Comments 11-21-11 - Weak Markets!

2011-11-21T09:10:00.001-08:00

Markets are called weaker this morning behind a weakerovernight session and weak outside markets.

In the overnight session corn was off 7 cents, beans where downa dime, KC wheat was off 5-7 cents, MPLSwheat was off 1-2, and CBOT wheat was 6-7 cents lower. At 9:10 outside markets have the equitiesunder pressure with the DOW down 230 points, crude is a dollar forty lower, andthe US Dollar is firmer with the Dec at 78.585 up 330.

Today appears to be another risk off type of day and withFriday’s CFTC report showing that the funds are still long over 100,000contracts of corn their would appear to be some risk out there of further liquidation. The funds also own a large percentage of MPLSWheat which could leave the market that has held in their the best susceptibleto some sort of risk off sell off. Technicallymost of our markets are looking rather ugly; be careful trying to catch a fallknife might be the term used.

Their has been talk that we should see some increased enduser demand/pricing down towards these levels. Many think that China will be buyers in the 5.75-6.00 range; I guessthat really remains to be seen. Longerterm a little price break to help demand is great.

I think one major risk that we have out there is thatproducers are longer then they typically are or maybe should be. What happens if we start seeing some fearselling? Most think that won’t happen untilafter the first of the year.

The market’s movement the past week and more so the pastcouple of months really should tell us that risk management is veryimportant. After all we have seen corngo from 8.00 on the board down to about 6.00; a 25% dip. The 2008 meltdown saw Dec corn go from 8.00all the way down to about 2.90; so we haven’t been under as much pressure asthat but we have seen plenty of opportunity slip by. Does that mean that many are in the hopestage of marketing? If so could theirstill be more downside risk then upside potential in the days and months tocome?

Bottom line is yes there is plenty of risk out there; so ifyou need help writing a marketing plan please give us a call. The biggest thing I think we need to rememberis that the worst case in selling levels that make you money is you don’t makeas much as you could have. The otherside of the coin is potentially finding one’s self in a position where you areselling at levels that simply don’t work; then what happens if a have to sellsituation comes up.

I don’t want to promote fear selling but rather riskmanagement and thus risk diversification. One tool that might work good with us having a decent to strong basiswould be a Min Price or MIN-MAX price contract.

With this week’s Holiday we will be moving our MWC MarketingRound Table to Tuesday; same time and same place. In Onida at 3:30; we hope to see you there.

Closing Comments and Charts for 11-17-11 as the grain markets fall apart!

2011-11-17T15:37:00.001-08:00

Markets where hammered today as the selling pressureaccelerated as liquidation was seen from the funds; adding to pressure was alittle bit of producer fear selling. When everything was said and done we saw corn down 28, beans where down20, KC wheat was off 21, MPLS wheat was down 9, CBOT wheat was off 24, thestock market was under pressure with the DOW down 135 points, crude off nearly4.00 a barrel, and the US dollar is firmer.

Also pressure to our markets was the fact that we had justhorrible corn exports we even had a cancellation of some corn that was sold tounknown (which is typically China). Cornexports where only 8 million bushels; driving around South Dakota it is prettyeasy to find that and much more on the ground.

Ethanol margins remain very good nearby; but we continue tomiss export business and today that along with outside markets ended up beingtoo much for our markets to bear. Thefact that we have been range bound for a month or more didn’t help anythingout; as we broke threw some technical levels that seemed to accelerate thedownside as we hit sell stops.

The technical picture has changed a little bit; hopefully itis just a head fake or a bear trap but technically there now appears to be moredownside risk then upside potential. Fundamentallywe simply lack export to domestic competition and our biggest fundamental isalso moving against us right now. Thefunds just don’t seem to have a reason to own anything; with the MF Globalissues and shaky situations in Europe no one has much interest in owningcommodities right now. As long as moneywants to flow out their remains tons of downside risk.

The good thing is that despite the poor exports and poordemand we are not exactly in an overwhelming or burdensome supplysituation. We have seen supply cut yearover year; so in theory we still should have chances to see a bounce at anytimeshould some demand show up or even if we have the outside markets stabilize. Adding to that thought would be the longerterm picture that says we need a lot of corn acres next year; so perhaps thatgives us a chance to sell higher prices sometime in the spring. But proper risk management should be tellingus not to wait that long; especially when we are still at good historicalvalues. Levels that make good returns; plus what happens to our markets if wedo plant 95 million acres of corn and continue to have more then ample worldsupplies.

The price action seen today reminds us of 2008 allover. With volatility down doingcontracts like min price, min-max or even simply buying some puts to helpprotect one from a complete melt down.

Attached are a couple of charts that show we broke threwsome key support area’s today and really opened up some down side risk.

Please don’t forget we still have free delayed price on bothwinter wheat and spring wheat.

Another Mock Trading Session in our Marketing Hour Round Table at MWC in Onida

2011-11-16T19:31:00.001-08:00

Today we held another MWC Marketing Hour Round Table meeting; in which we discussed current issues, looked at various charts, talked a little on basis, and then did some mock trading.

Here is a recap of our mock trading.

First Dan was stopped out of a long KC wheat position for a small profit; as that was the only booked trade that was closed today. It leaves us with about 75k profit on our winners with about 25k losses for a net of around 50k profit since we Sept 1st.

On the futures side of things Kevin added stop for his MPLS-KC Spread; in which he is a little bit behind. I added a stop and placed an objective on my long corn while adding more length at today's close. Basically a trade that is a scale buy trade.

Dan then moved his risk on his long MPLS March wheat up to help GTD that he locks in another winner; while opening up the upside; figuring a break threw of 9.00 could quickly accelerate buying.

I then had an open order to buy MPLS at 9.00 on a buy stop; decided to place a sell at the market with a 20 cent objective and changed my buy stop to a risk and reverse against my short MPLS March at 8.90. Bottom line i remain friendly but look for the market to congest a little bit before trying to make another leg higher.

Chris then placed our first non-grain trade; he shorted crude oil at 101.69; with a risk to 103.00 and a reverse objective at 95.00.

Dan then went long corn on the march; risking to 6.42 with an objective of 6.71.

Lastly on the futures bought 1 jan bean at the close; placed another order to buy another at 11.85; with a risk of 11.79 and an objective of 12.25

On the options side of things the only adjustment made was Chris putting in an order to sell 1 MPLS March 8.50 put if we close the MPLS March Futures above 9.00; adding to his strangle that he is currently up about 2500 on.

The last trade was Jeremey purchasing an 11.50 Jan bean put and buying a 12.00 Jan bean call. My exit is next week Wed (or at least that is the exit plan). The reason for the purchase of both of these with a game plan of exiting soon; is simply to try and pick up a little increase in volatility as these options only have an implied volatility of about 14-15%; whereas the corn and wheat options seem to be 25-35%; I don't want to have the theta eat me away that is why I plan on exiting in about a week; as i have it calculated that theta is going to cost about 30-35 a day; while a 10 % spike in volatility could give me a chance to make a couple thousand and a big move either way allows gamma to help my net delta position out in a hurry.

Jordan was ill and didn't make the session; so all of his open trades are still open. Perhaps being long all of the beans made him a little ill?

Please make sure to join us next week in Onida as we have another session. With the Thanksgiving Holiday we might move it up a day; but if we do we will have plenty of text messages and emails out.

Grain Market Opening Comments 11-15-2011

2011-11-15T08:07:00.001-08:00

Markets are called mixed to better following an overnightsession that was mostly firmer with beans leading the way higher.

In the overnight session beans where up 15 cents, KC wheatwas up 3, MPLS wheat was up 2-3, CBOT wheat was up 1, and corn was up 3-4cents. At 9:15 outside markets have equitiesweaker with the DOW off 33 points, crude up 60 cents, the dollar is up about342 with the DEC at 78.08.

Yesterday we had export inspections out that had beans wellabove what is needed on a per week basis while corn and wheat continue to lagwhat is needed on a per week basis to meet current USDA projections.

Basis is hit and miss on the grains; as we simply don’t haveenough export to domestic competition for basically all three of the majormarkets. Corn basis is firm; but we lackexports, wheat basis is also firm but spot was weaker yesterday then it waslast week. Some to arrives are alsoweaker; late last week I sold a 15 pro to arrive train and yesterday the bid Igot for the same quality was 50 cents lighter then what I sold Thursday/Fridaylast week.

Bottom line is the small spike we seen to start last weekcaused a little movement in some of the grains thus has lead to basis beingrather choppy because there is plenty of room everywhere, rail freight isn’ttight, and we simply lack export to domestic competition.

Markets have now opened and about 10 we have the marketsweaker then where the overnight session left off. We started off a little firmer then where theovernight session left of but currently we have beans up 10-11, corn down apenny (6 cents off of it’s highs about 30 mins ago), KC wheat unchanged, CBOTwheat up 1, and MPLS wheat up 1. Lookfor the rest of the session to be choppy and probably range bound like most ofour markets have been for the past month or so.

Technically many markets are flirting with support aftertesting resistance last week. Thebiggest thing our markets don’t have going for us is we don’t have much moneywanting to flow into grains; outside markets and the problems in Europe havelead to a lot of risk off type of investments. Perhaps making the chances of taking out last years highs lower thenmany expect is the fact that risk doesn’t want to flow into our markets, theworld seems to have solved many of it’s supply issues, and we simply havefarmers sitting on a lot of product at a time when the exports are suppose tobe coming from us and that could be leading to a shifting of demand to otherareas in the world that seem to have ample supply.

Don’t forget that we have our weekly meetings every Wed inOnida.

Also with the nice winter we have had don’t be afraid totake advantage of our free delayed priced program for both winter wheat andspring wheat.

Please give us a call if there is anything we can do foryou.

USDA Crop Report Nov

2011-11-09T09:40:00.000-08:00

Below is a forward from our main CountryHedging Rep and opening comments.

Markets are called mixed this a.m. behind aUSDA report that is overall probably neutral to slightly negative; outsidemarkets are under extreme pressure and that leaves overall thoughts negative.

In the overnight session we saw corn off apenny, KC wheat was off 8, MPLS was off 8, CBOT wheat was off 7, and beanswhere off about 8 cents. At 9:20 outsides are under pressure withcrude down 2 a barrel, equities very weak with the DOW down 285 points, and theUS Dollar making a new move for the recent high with the Dec up 1.289 at 78.05.

Here is a recap of report

The markets have now opened and been rathervolatile during the 1^st houror so of trading. We opened underpressure with the grains lower then most had thought; corn was down about 10-14on the open, wheat was down 20ish, beans where also twenty or so lower. Now about 11:00 we have seen some massiveimprovements. Spring wheat lead the wayhigher as it has been up 5-10 cents, and we now have the other wheat contractsonly down 5-10 cents so a good dime off of their lows in both KC and CBOT. Corn has also managed to pull back inpositive territory up about 2-3 cents and beans are off about 8 cents.

Winter wheat basis feels firm and maybefirmer; I did notice bids today are showing inverses bid for nearby now aheadof JFM. Spring wheat feels a littleweaker on the basis side of things because of an increase in country selling. Part of the firmness in winter wheat basisover the past couple of months has been the spread between MPLS and KC; with itmaking another leg up firmness in wheat basis shouldn’t go away overnight. BUT today’s carryout numbers are not exactlybullish for wheat; so when the supply starts moving…………watch for basis to comeunder extreme pressure. Keep in mindbuyers are like producers in the sense when things start going their directionthey typically try to pick tops or bottom’s; thus when prices are going up itis hard to buy grain some days because everyone jumps on the bull camp. The opposite is true when things start goingdown; it becomes hard to sell because all of the buyers are afraid it is goinglower.

Don’t forget we are still offering freedelayed price for both spring wheat and winter wheat.

Also this afternoon we will have anothersession of our MWC Marketing Hour Round Table. We invite you to join us.

Thanks

Jeremey Frost

GrainMerchandiser

MidwestCooperatives

800-658-5535

800-658-3670

605-295-3100(cell)

605-258-2166(fax)

jeremey.frost@chsinc.com

www.midwestcooperatives.com

http://grainmarketingplans.blogspot.com/

From: Fitch, Joseph
Sent: Wednesday, November 09, 2011 8:24 AM
Subject: Morning Note

Good morning,

We’ll it’s report morning. I’ll cover the details andtry to give some thoughts.

Corn yield down to 146.7 vs 148.1 last month, 1.0 less thantrade guess. Production is down 123 mln bushels. Exports steady,ethanol steady, therefore feed usage must be falling because ending stocks fallfrom 866 mb down to 843 mb, which is only a change of 23 mb. World cornis 121.57 mmt vs 123.19 mmt last month.

Soybeans – yield 41.3 vs 41.5 last month, .1 lower thantrade guess. Production is down 14 mb. Exports down 50, crush steady,therefore ending stocks up 35 mb to 195 mb and on its way higher. Worldsoybeans is 63.56 mmt vs 63.01 mmt last month.

Wheat – SRW, White, and Durum no significant changes. HRW saw a 30mb reduction in exports and must be some small upward revision tofeed or domestic usage because ending stocks are up 20 mb to 318 mb vs 298 mblast year. Spring wheat saw a production decline of 7 mb on the resurveyof the farmer. So production was 398 mb. Exports were raised by 30mb to 250 mb. This could prove to be on the high end, but raising exportsseemed justified in my analysis. Ending stocks fell by 28 mb to 129 mb sothere is a small reduction in domestic usage. Stocks to use falls toabout 26%.

World wheat was surprisingly close to steady. Endingstocks grew from 202.37 mmt last month to 202.60 mmt. Kazakhstan wasraised 2 mmt as had been expected. This can be a competitor to springwheat some years.

One thing from yesterday is that deliverable stocks of wheatin Duluth declined from 12.758 mb to 12.389 mb. One year ago stocks were26.435 mb. This is the wrong time of year to be pulling stocks out. It makes me nervous because it improves the possibility of the spreads stayingat inverses.

Movement on grains was better yesterday and spring wheatseemed to be moving at a better clip. Basis could weaken up next weekwith the better movement especially if spring wheat tries to head higher on thebalance sheet changes.

Corn has traded up a little in the OTC market. Beanshave 15 cents protection. Wheat is likely mixed with spring wheat likelyhigher and winter wheat more dependent on corn for strength. Outsidemarkets are negative this morning and could influence trade.

Even though the corn yield is still moving tighter, I’m notsure that the farmer is going to get the very bullish reaction that some seemto want. I doubt this information without further stress in the grainmarkets like a turn for the worse in South America weather or another largedecline in the yield on a future report is going to allow this market to tradeback up to its previous highs. Farmers who are aiming for $7.50 or $8.00corn are going to be disappointed. I think they need to make realisticsales going forward and make some sales against production for the next yearand possibly further out. Soybeans continue to look like a sell on thebounce candidate to me. There isn’t anything bullish there withproduction in SA looking like it is going to keep getting bigger and our exportwindow getting clipped.

JoelFitch
Market Analyst
800-328-6530
651-355-3792
www.countryhedging.com

Country Hedging, Inc.
The Right Decisions for the Right Reasons

Thiscommunication may contain privileged and/or confidential information and isintended only for the use of the individual or entity to which it isaddressed. If the reader of this message is not the intendedrecipient, you are hereby notified that any unauthorized dissemination,distribution, and/or use of this communication is strictlyprohibited. Country Hedging, Inc. makes no representation orwarranty regarding the correctness of any information contained herein, or theappropriateness of any transaction for any person. Nothing herein shallbe construed as a recommendation to buy or sell any commodity contract.

Update on trade for Jeremey on short corn

2011-11-09T07:54:00.001-08:00

With the USDA report neutral to friendly corn; I am going to take the chance this morning and buy back my short corn scale trade. Presently Dec corn is at 6.48; so this allows me to lock in a little over $4,000 profit. I am not going to re-enter this trade; but I am going to place a buy stop at 6.65 basis the Dec to go long 1 contract; if I do get filled I will then place buy orders at 6.60 for 2, 6.55 for 3, and 6.50 for 5. But only if I first get filled by the stop.

opening grain market comments day ahead of USDA report

2011-11-08T08:17:00.001-08:00

Markets are called mixed this morning a day ahead of a USDAS & D report behind another choppy overnight session.

In the overnight session corn was up 2 cents, beans where up7, KC wheat was off 2, MPLS wheat was off 2, and CBOT wheat was 2 lower. At 9:05 outsides are supportive with the DOW up about 50 points, crude up abouta dollar a barrel, and the US dollar softer with the Dec down 340 at 76.80.

Not much for news out this a.m. and with outside markets alittle on the positive side; but not really moving much many expect a quite dayahead of the USDA report. I should remind everyone that the last time wesaw a big move was the day before the last USDA report in Oct; (not the actualreport) so just because everyone continues to expect choppy sideway’s priceaction doesn’t mean that is how it pan’s out.

Basis remains firm on winter wheat, spring wheat, soybeans, and corn. Ilike basis offers especially if I am bullish because of how the basis – futures– cash price relationship typically works.

Overall markets feel like they are sellers markets; but I amnot sure that is from super demand. More the reason I call our marketssellers markets is the fact that producers are simply not being forced to moveproduct at this time. Eventually that could change and if export demanddoesn’t pick up or we don’t find some type of end user competition our marketscould quickly turn to buyers markets. The world grain markets all appearto be buyers markets where the business typically goes to whoever will undercutthe other the most. I.E. we have plenty of grain in the world at thistime.

Keep in mind we are offering free delayed price for bothwinter wheat and spring wheat.

Spread price action should be interesting and has beeninteresting; the tightening of spreads is an indication of demand especially ifspreads tighten up during index fund rolling periods; where the index fund isselling the front end.

It looks like the USDA report will be out like scheduledWed; despite some asking to move it back because of the MF Global issues.

Please give us a call if there is anything we can do foryou.

Marketing Thoughts ahead of USDA report - Closing Comments

2011-11-07T15:39:00.001-08:00

Markets closed about how they opened; mixed and choppy witha lack of direction as consolidation continues.

When all was said and done corn closed down 1-3 cents, Beanswhere down 18-20 cents, KC wheat was up 4-7 cents, MPLS wheat was off 8 cents,CBOT wheat was up 2, equities closed firmer with the DOW up 85 points, the USdollar near unchanged and crude up a little over a dollar a barrel.

Price action today was rather choppy with a lack of soliddirection; about the same as the past month. Did you know that corn since Oct 12^th corn has only traded a43 cent range and since the 1^st of the month only about a 29 centrange with every day trading inside the previous days range. Now that is consolidation at its finestespecially when you consider that corn traded 45 cent range on Oct 11^ththe day before the last USDA report. Nowwhether or not that information means much if anything is yet to bedecided. Could we move limit tomorrowmuch like we did before the last USDA report? Sure. Could it be down? Sure it could. Could it be up? Sure it could. Could we continue the sideway’s pattern andhave another inside day until the report comes out? Without a doubt that is possible as are manyof the above and many other scenario’s. Themarket really isn’t tell us.

To me the consolidation is telling us that we willeventually move out of the choppy sideway’s trading range; but it doesn’texactly have to happen today nor as soon I or anyone else thinks. Heading into the report there are many campsout there; some feel that the producer is too long and hasn’t sold enough plusthey think yield is a little higher then what the last USDA report was at. Others think demand is strong which I wouldhave to agree the margins for many of the users of corn are having a good run,plus they think that yields are light; too much dry down on the row crops.

So there you have it; I don’t know what is going to happenon the next USDA report; but I think I do know that proper risk managementshould always be used. Does that meanone should sell some ahead of the report? Maybe; that depends on where you are at in terms of marketing, cashflows, and future known “have to” move or sell for X reason, along with 100’sof other factors to consider. So to mewhat proper risk management means ahead of a USDA report is am I comfortable ifwe move limit up, trade sideways, or limit down; and for more then 1 session ina row. Now one probably should ever be100 % comfortable with a limit move one direction or another but after you takeaway your personal bias do you still have “balance” in what you have left tomarket or “balance” in what you have already sold?

If you don’t have balance or comfort heading into the reportthere are plenty of options and moves that should help one out. Maybe as simple as buying short term puts forprotection or calls to help defend sales so to speak. If you need help with a marketing plan orusing futures and options in a risk management portfolio please give us a call. Don’t forget we are a Country Hedging Branchplus we offer a variety of contracts such as Min Price, and MIN-MAX contractsthe help you in your marketing plans.

Also I want to remind everyone that we are offering FreeDelayed Price on both winter wheat and spring wheat. Free of charge until July 15^th. What a deal……right? Well yes and know; keep in mind one of themain reasons for end users to offer delayed price is they feel prices will becheaper in the future. Now in the caseof elevators it would typically mean basis risk. This is one of the reasons we have been heavyon promoting basis contracts lately as we feel basis is at levels where itmakes sense to consider locking it in via some sort of contract for at least asmall percentage of your bushels left to market.

Also don’t forget our weekly MWC Marketing Hour RoundTable. This Wed in Onida at 3:30.

Please give us a call if there is anything we can do foryou.

Charts 11-7-11

2011-11-07T10:04:00.000-08:00

Here are some charts for corn, KC wheat, MPLS Wheat, CBOT Wheat, soybeans, the US Dollar Index, and the DOW. These are typically charts that we go over and discuss at our weekly MWC Marketing Hour Round Tables; where we also do a little mock trading.

Opening Grain Comments 11-7-11

2011-11-07T08:30:00.000-08:00

Markets are called mixed this a.m. behind a mixed choppyovernight session as well as choppy outside markets.

In the overnight session corn was off a penny, beans wheredown 4 cents, KC wheat was about a nickel higher, MPLS wheat was down 2, andCBOT Wheat was up 2. Outside markets at 9:15 have equities slightlyfirmer with the DOW up 33 points, Crude is up about a dollar a barrel, and theUS Dollar is weaker with the Dec at 77.05.

This week is a report week so ideas are that we chop arounduntil the report comes out on Wed a.m. and perhaps that report will give us acatalyst to break out of the recent trading range we have had.

Estimates for the USDA report are for carryout’s of 801million bushels of corn which is down from last month, 185 million bushels ofbeans which is up from last month, and 819 million bushels of wheat which isdown from last month. Slight decrease to no change is theoverall trade guess for corn and soybean yield.

Basis has been very strong for most of the grains. Lately many have been doing some winter wheat and spring wheat basiscontracts. I think this might be a good move; especially if we doeventually get a run on the board as the typical relationship between futures,basis, and cash price is one where basis offset’s the moves in the board. Basis is strong and ideally if the board starts to run basis would then weaken;especially if the rally isn’t demand orientated or lead.

With the firm basis we have started to offer Free DelayedPrice on both winter wheat and spring wheat until July. The reason weoffer this is a two fold reason; one is because we want to increase movement;but the other reason most end users offer delayed price is they have a biastowards the direction of the price. In wheat’s case it is a basis bias;and that bias is that it will be wider or worse later; especially when you addthe inverses that are out their in the flat price of both winter wheat andspring wheat.

Spring wheat has a flat price inverse of over a dollar abushel versus the new crop bids. One reason many struggle to move wheatin our area has been the off quality. But with the inverse that we haveit still makes since to move the wheat now versus sitting on it and trying toblend it off at new crop train.

As example say you have some wheat with low test weight andhave VOM; flat price it might only be worth 8.00-8.50 or so today; but that isstill about 50 cents to a dollar better then #1 14 pro new crop springwheat. So just because there is a discount doesn’t mean one should sit onit and hope to be able to blend it off next year while taking no discounts asbottom line it just isn’t the right business decision. It would be achoice that could work out and work out well but basis on spring wheat isinverted big time as well as the board. Those inverses more the pay forthe discounts that one might see.

Add to that the fact that some are willing to take the offquality wheat now; when they where not at any level just a few monthsago. Bottom line is the market is looking for wheat, hence the strongbasis, the free delayed price, and the flat price inverses that are in themarket. The question when marketing should become why are they lookingfor the wheat. Is it strong demand or perhaps just bulled up owners of theproduct. Do we have more supply then we do demand? I would say big time;but that supply is in hands that don’t need or want to move it. Whathappens if/when that changes?

Don’t forgot that each Wed we are still having our MWCMarketing Hour Round Table. Our attempt in this is to have some sort ofMarketing Club in the future. We hope to see you there this week.

Thanks

Updates from this week's MWC Marketing Round Table - Mock Trading Session

2011-11-04T18:50:00.000-07:00

This past week we held another session of our MWC Marketing Hour Round Table.

As always we went threw charts, talked a little fundamentals, and placed some new trades while updating or adjusting other trades during the mock trading session.

Here is a recap of the open positions after this week's session.

In the futures section of the mock trading we have the following open

Jordan - scale bought CBOT Dec wheat; Long 2 Jan beans, long CBOT Wheat versus short CBOT corn (March), Long July 12 beans versus short Nov 12 beans

Jeremey - Scale trading short side of Dec corn.

Kevin - Long KC Wheat short MPLS wheat (March spread), long Jan beans up until Thursday at that time he took profit and now has reversed to be short Jan beans, Long CBOT March Wheat versus short CBOT Corn.

Dan is long KC March Wheat

For the option trades open we have the following

Kevin has an open free trade as we speak in that he is long 7.00 Dec corn call and short 8.20 (4 of them); this was a ratio spread that he rolled out and now has profit locked unless corn shoots back over 8.50 ish in the next 3 weeks.

Jordan has a 3 way corn trade; once again after adjustments not much will happen. He is long 7.50 puts short 7.00 puts, and long 7.50 calls; overall it appears like he is set up for a small loss.

The next trade open is one of mine in that I am long july 7.00 corn call, short 3 of the 8.50's, short 2 of the July, long 1 of the 6.50, long 2 of the 5.50 puts, and then short one of the 7.00 calls. We do our trades using position book; so when we adjust we place the trades in the same section offsetting then move to the booked profit or loss when the whole trade is complete. That is why this trade has both a long and short call of the same strike. It was orginally a ratio spread trade and since has been adjusted.

next on the list is Jordan with a short KC wheat 800 put and short 900 call. With KC wheat well below the put level he is basically long KC wheat from 8.00 minus the premium he received for the puts and calls.

Kevin is next with another adjusted trade that is now a GTD Winner. We love trying to turn option trades into free trades when given the opportunities. he is long the 750 put, short the 750 put, short the 800 call, long the 8.00 call and long the 8.50 call. Bottom line is he placed the trades at the right time and has a free trade.

Jordan is long 4 of the MPLS Dec 9.50 calls, short 1 of the CBOT March Wheat 6.00 puts.

Chris is short a 10.00 Dec MPLS call and a couple of the 8.00 MPLS March puts

Jeremey is short a 6.00 put in JULY 12 CBOT Wheat against 2 short 9.00 calls

Jordan owns a 6.40 Dec corn call and put both

Kevin owns a couple Dec 6.55 corn calls against a short 6.15 corn call.

And lastly I have 3 different open option trades. First is a a bean trade; where I am short the Jan 13.50 calls, long a 11.70 put, short a 11.20 put. The trade at one time owned the 13 jan calls; but I liquitated them this week. To orginally pay for the trade I sold a Nov 2012 12 put (which allowed me to own multiple call spreads 9 of them). When the trade itself looked to be going south this week I adjusted via selling the calls I owned; keeping the puts, and further selling additional options to adjust. I sold the Jan put as mentioned above but I also sold a couple Nov 15.00 bean calls.

Next I have a short option trade for CBOT Corn in that I am short the 6.00 puts, 7.00 calls, and 7.50 call.

Lastly a bullish trade for March CBOT wheat; long the 6.60 call, short a 7.30 call, and short the 6.00 put.

Going home on Friday we had open trades that are up aprox 8,075. As for the booked trades we have profits of $ 70,097.50 with losses of $25.784.00 for a net total of about $44k profits.

Keep in mind that past performance doesn't mean future results and we are simply doing MOCK trading with fake money in an attempt to start a marketing type club in the near future.

We hope to see more of you next week.

Different Day - Same trade update

2011-11-01T07:56:00.000-07:00

another update; yesterday's bounce allowed me to get some more orders filled on my scale corn trade; with the break in the markets i am once again exiting again this time for an 1800 profit; once again i will re-place all the orders

Trade Update

2011-10-31T08:23:00.000-07:00

Another trade update for Jeremey.

Monday morning with outside markets under pressure; my corn scale trade has allowed me some profits. This market still feels like a sideway's market so I am going to get out at 6.38 1/2; and replace orders to re-sell the Dec corn. It books me a profit of 4,275; part of me thinks I should reverse and go long but i think i will stick with the original trade.

Trade update for Jeremey

2011-10-26T08:30:00.000-07:00

With corn under pressure this morning I am going to add a stop to ensure that I can lock in a profit on the open corn scale selling trade that I have on. I presently have 12 short Dec corn; that i started selling at 6.43, I then sold 1 at 6.47, 2 at 6.50, 3 at 6.55, and 5 at 6.60.

I am going to place a stop in at 6.40 1/2 ; while orders back to re-enter original trade if I get stopped out.

Basically this market has traded sideways for some time; so my thoughts are perhaps there is a decent chance it continues until new news finally moves it one direction or another. So in the mean time try to take what the market is giving us.

Here are a couple charts to help show my thoughts.

Grain Market Comments Closing 10-24-11 Another poor corn close?

2011-10-24T15:28:00.001-07:00

Markets closed mixed to firmer today.

Corn was up 2, beans where up 14-15, KC wheat was up 12,MPLS wheat was down 1, CBOT wheat was up 10-11 cents, crude was up nearly 4.00a barrel, equities where firmer with the DOW up 105, and the US dollar ispresently weaker 200 at 76.198.

Technically today’s performance by corn wasn’t the best aswe appear to keep breaking out but yet closed well off of our highs once again. Harvest pressure showing up someplace?

The main headline continue to be a lack of producer selling;with spreads tightening and basis firming as noted in our bids today. I believe we firmed up nearly all of thecorn, wheat, and soybean slots and this hasn’t been the first time in the pastcouple of weeks that this has happened. We are quickly nearing levels where one might want to consider lockingin the basis (especially for those of you with good HTA contracts out there) orat least having basis offers out there.

Buyers are hunger inthe sense that they simply haven’t got the supply that they are used to; plusgoing into this fall harvest pipelines where not exactly full. Add to that the fact that most produceroperations have more storage then ever, less need to sell then ever, andborderline as bullish as anytime in the past and we have very solid basisappreciation that has been happening the past couple of weeks. When it ends who knows, in marketing 101 whatis suppose to happen is basis is suppose to appreciate, then board spreads aresuppose to firm, followed by a rally in the board to help pry loose the grainfrom the producers. Also in theory basisand the futures offset each other in cash movement. Which is why if one feels strongly that theboard has plenty of upside room doing a basis contract or having a basis offerout might make perfect sense. In thebasis/cash/futures theory when the board goes up basis goes down; when theboard goes down basis goes up. The pastcouple months or so we have seen it happen where the stronger basis has helpedout the weaker board; and now we appear to be in consolidation mode on theboard.

If the breakout from this consolidation is to the upsidethen we do open the risk to basis coming under pressure in the future. Whether basis stays strong or see’s someweakness on a rally in the board will probably demand on what causes the rallyand how strong our demand actually is. My opinion is that our demand is more of a lack of supply because ofbullish producers versus super strong competitive demand.

If you would like more information on basis contracts andhow they work please feel free to give us a call.

The one market that hasn’t followed suit yet in strong cashmarkets has been the birdseed market. Lack of demand or maybe it’s time is yet to come? One thing that will hang over the sunflowermarket for sometime will be the big world crop. Perhaps that is why the birdseed market is still a $5.00 or so premiumto the crush market. The huge worldsupplies of all of these grains along with fund money flow remain one concernwhen looking at the downside risk. Addto that the fact that it feels like producers simply are not selling enough andI think we have created markets that have plenty of downside risk even thoughtoday things feel good or look good.

Please give us a call if there is anything we can do foryou.

Thanks

Mock Trading and Option Assignments

2011-10-22T08:58:00.000-07:00

This past week Wed we had another session of MWC Marketing Hour Round Table in which we placed some mock trades after looking threw some charts and talking about this week's price action and what was behind it.

No adjustment trades where made; but the following trades where placed.

Dan the man bought KC March wheat at 7.20 with rather aggressive objective of 8.90 while risking to 6.90. Awesome risk reward ratio if he can let a winner ride that long.

Jordan bought some volatility as he went long the 6.40 Dec corn call as well as the 6.40 dec corn put; spending about 55 cents total.

My self (Jeremey) placed an aggressive ratio calendar type play in beans. I bought 9 of the 13 jan bean calls, sold 10 of the 13.50 calls, sold 1 of the Nov 2012 bean puts, and purchased 1 of the 11.70 Jan bean puts. Bottom line a bullish bean trade.

We did book some losses this week as some of the Nov options expired and with that we took some futures. Jordan is now long 1 Nov bean at a net of 13.70 and 1 at a net of 13.00

I decided to offset my what would have been long Nov bean contract and exited my three leg trade booking a loss.

Since our new fiscal year started we now have overall winners totaling about $49k with losers totaling about $12k.

Net open positions total are down about 2k; most of which is Jordan's bean longs down about 11k.

We hope to see you next week at our meeting!

Opening Grain Market Comments 10-19-11

2011-10-19T08:40:00.001-07:00

Markets are called mixed this a.m. behind a choppy mixedovernight session and outside markets that are on the quite side of things.

In the overnight session corn was up 2 cents, beans whereunchanged to off a penny, KC wheat was up 4-5 cents, MPLS wheat was firmer byabout a nickel, and CBOT wheat was up 5 cents. At 9:20 outside markets have the US Dollar weaker down about 290 at76.848 on the cash index, European wheat is up a little over a ½ of a percent,equities are near unchanged also with the DOW up about 30 points, while the S& P is near unchanged, and crude oil is up about 30 cents a barrel.

Overall another day with out a lot of fresh news to effectour markets. The biggest thing remainsthe overwhelming world supplies of some of our grains versus tight domesticstocks, and a lack of producer selling at a time when seasonally it is at it’shighest. Basis continues to firm on therow crops in many areas and spreads have tightened up on the row crops asproducers are able to store more then the market thought. Longer term my personal opinion is we aregoing to run the risk of having too much supply sitting on top of the market;but only time will tell as demand overall for grains is good and even thougheventually producers have to sell or move product; end users eventually alsohave to buy product. So it reallyappears to be coming down to a game and right now producers are more in controlthen normal.

Don’t forget that we do have our MWC Marketing Hour Round Tablethis afternoon in Onida at 3:30.

Watch outside markets for direction and see if we ever seesome selling pressure from this year’s row crop as we go forward.

Thanks

new Trade for Jerermey

2011-10-16T15:00:00.000-07:00

After getting stopped out of my scale wheat trade last week; I decided to try another scale type trade. This time on corn; as my chart I posted on Friday I thought looked like a selling opportunity. Plus I think that this year's harvest still hasn't seen the producer selling that I think happens at the tail end of harvest.

My new trade is off of Dec corn; it is also a scale trade.

Sell 1 at 6.43

Sell 1 at 6.47

Sell 2 at 6.50

Sell 3 at 6.55

Sell 5 at 6.60

Sell 8 at 6.70

Risk to 7.00

Objective of 5.85; with plans of moving stop up if I can lock in a winner or adding option leg to protect profits.

To add a little complexity I am also selling 2 of the 6.00 puts for 12 cents a piece.

Which turn into covered puts if I get my first couple of orders filled.