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Greg's Gossip
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The following is an example of the Greg's Gossip which is our weekly marketing advice included in our service.

Market Data, Inc. - GREG'S GOSSIP

Updated Marketing Advice

June 19, 2008

Market Information, Marketing Steps to be considered, and USDA news:

MARKET HIGHLIGHTS: The grain markets are in turmoil. Consumer complaints to high food and fuel prices is growing and Congress feels the pressure to do something. Often this type of environment causes quicker actions that may not be the best solution for the long term - AND - it is an election year. WHEAT stocks in the U.S. and world are projected to rise back to reasonable (although less than the average since 1990) levels. The U.S. carryout at the end of 2008/2009 is listed at 487 million bushel or a 77.4 day ending supply vs. an average level since 1990 of a 94.9 day ending supply. The 2008/2009 world carryout of 132 MMT is a 74.7 day ending supply vs. a 105.5 average level. Both of these ending stock levels are up from 2007/2008 but world demand for wheat feeding could grow even more as the U.S. corn crop is off to a very bad start. CORN crop ratings in the U.S. are at the lowest level for this time of year since 1996 and the flooding problems could easily have caused 2 to 4 million acres of lost production. The OC corn (2007/2008) stocks level is at 40.4 days of ending supply vs. a 54.8 average since 1990 and world ending 07/08 stocks are at a 56.8 day ending supply vs. a 89 day average. The 2008/2009 ending world corn stocks fall to a 47.6 day level while the U.S. stocks are projected to drop to below pipeline levels (the level needed to not see shortages in some areas) of just a 19.6 day ending supply - WITH - the assumption of 86 million acres of corn being planted. Assuming that 4 million acres of corn are lost and using a 91% harvested percentage, this could equate to 525 million bushel less U.S. supply in the 2008/2009 marketing year (using a 145 bushel average yield). The key question is what price or actions are needed to lessen demand so the current ending carryout of 673 million bushel does not drop to under 150 million bushel (673-525). USDA is looking at early out on CRP acres which will help with 2009 but not 2008 and they could allow (or force out) up to 12 million of the 34.7 million acres currently in the CRP program. It is estimated that just 5 to 8 million of these acres are in the corn belt but many acres of CRP in places such as KS and CO could be returned to production without any major short term environmental factors. IF USDA moves quickly, some of these acres might be able to go to winter wheat but things would have to work perfectly for that to happen. SOYBEANS have similar weather problems as corn in that flooding appears to have taken or will require replanting of 1 to 3 million acres. It is not too late to plant some shorter season soybeans (lower yielding) and - IF - the weather allows, most of these acres and perhaps 1 to 2 million of the lost corn acres could still get planted. This would still leave ending 2008/2009 carryout at below normal levels in the U.S. as currently this is placed at a 20.9 day ending supply vs. an average since 1990 of 37.2 days. The world carryout provides a buffer for the low U.S. carryout with a projected ending 2008/2009 supply of 76.9 days vs. a 74.2 average figure. WE GIVE MORE SPECIFICS ON MARKET DEVELOPMENTS IN THE CURRENT SUMMARY SECTION FOUND AFTER EACH INDIVIDUAL CROP.

THE BIGGEST MARKET DEVELOPMENT COULD STILL BE CONGRESSIONAL ACTION IN BOTH THE OIL (lower oil prices could translate to lower corn prices) and GRAIN markets. Commodity funds are long over 3.2 billion bushel (perhaps as high as 4 billion bushel if the swaps positions are reclassified as may happen in July). Remember that it is an election year and Congress could gain some goodwill by reducing oil and grain (food) prices ahead of the election. In a recent DTN article, Joe Lieberman was proposing to introduce legislation for a ban on large institutional investors, including index funds, in the commodity markets. THIS IS AN ALERT THAT PRODUCERS NEED TO GET PRICING DONE NOW!!!

MARKETING STEPS NEEDING CONSIDERATION: PLEASE CALL US WITH ANY QUESTIONS OR FOR ASSISTANCE!

Wheat: Harvest delays and strong corn prices support the market

OLD CROP WHEAT: As of 5/12/2008 the MDI Target Futures Prices for KC WHEAT OC pricing on JUL 2008 futures are $9.00 for 80% pricing and $9.50 for moving to 100% priced. KC WHEAT JUL 2008 futures were $9.61 on 6/18/2008.

2007 OC pricing saw K.C. wheat futures prices continue their rally this week - partly in conjunction with higher corn and soybean prices. Cash sales are the preferred method of pricing as we are reaching our target levels - see above. Bids for higher protein K.C. 13.0 protein wheat are $.1.25 over 11.0 pro meaning storing protein wheat could return a higher price. JUL futures closed at $9.45 on 6-18-2008 - up $.39 on the week. Catch up on 2007 OC pricing now.

NEW CROP WHEAT:  As of 5/12/2008 Target Futures Prices for KC WHEAT NC pricing on SEP 2008 futures are $9.00 for 70% pricing and $10.00 for moving to 100% priced. KC WHEAT SEP 2008 futures were $9.61 on 6/18/2008.

Bring 2008 NC sales of K.C. wheat current as we rallied this market $.39 on the week with SEP futures closing at $9.60 on 6-18-2008. Cash sales of at least 50% of your expected 2008 production can be made at the current price level. Put options are expensive as witnessed by the cost of around ($.42) for a $8.90 K.C. SEP put which is ($.70) out of the money. Those wanting to lower the cost of price protection to around ($.30) would need to look at the purchase of a $8.40 to $8.50 area on SEP K.C. put options. Those currently harvesting wheat with on farm storage may want to bin any 58# wheat with over 12 protein as the current rail K.C. protein bid on 13.0 protein is $1.25 over 11.0 protein bids. The crop report shows adequate wheat available in the U.S. and world but the sharp rallies in the corn and soybean markets continues to pull K.C. wheat higher. The harvest is starting in KS and many yield reports out of TX and OK are good. OK is around 2/3 cut out as of this date. Catch up on pricing NOW - even it is just with the use of put options.

As of 5/12/2008 Target Futures Price for JUL 2009 KC WHEAT NC pricing is $8.75 for 20% of the crop. KC WHEAT JUL 2009 futures were $10.12 on 6/18/2008.

As of 5/12/2008 Target Futures Price for JUL 2010 KC WHEAT NC pricing is $8.75 for 20% of the crop. KC WHEAT JUL 2010 futures were $10.06 on 6/18/2008.

For those who can handle margin call risk, look at using short futures hedges OR a MIN/MAX program of buying a JUL 2009 K.C. $9.30 put for a cost of ($1.05) and selling a $11.60 call for a return of around $.95 - net cost of ($.10) would be a good risk management move. JUL 2009 K.C. futures closed 6-18-2008 at $10.12 - up $.33. You could also hedge of 20% to 40% of the crop vs. the MIN/MAX but if you are OK with margin calls, why not leave some more upside price available with the MIN/MAX plan. This could be done to our target pricing level on up to 40% for the 2009 crop. JUL 2010 K.C. wheat futures could be used to hedge up to 33% of your expected production at the closing price of $10.06 on 6-18-2008 - up $.16. It is difficult to obtain 2009 and 2010 NC bids due to the risk the end user has of margin calls on these situations. For example - IF - a grain elevator normally shoots for a margin of $.25 a bushel and with an operating interest rate of 7.0% had $2.50 of margin calls for 1.4 years the interest cost is equal to this amount and the margin calls on 2010 crops would only have to be $1.50 a bushel (average) to have this same cost for 2.4 years. This makes the basis levels on bids that are available on these crops seem very wide but there is a reason.

Corn and Sorghum: Flooding losses could lower total corn acres by 2 to 4 million

OLD CROP CORN AND SORGHUM: As of 5/12/2008 the MDI Target Futures Prices for CORN OC pricing on JUL 2008 futures are $5.80 for 90% pricing and $6.40 for moving to 100% priced. CORN JUL 2008 futures were $7.46 on 6/18/2008.

OC corn and sorghum pricing should be brought up to 100% with cash sales on at least 90% of the crop recommended. Put options should be used to move to 100% priced by purchasing a SEP $7.00 put for a cost of ($.35) a bushel. A $7.00 put is ($.43) out of the money as SEP corn futures closed at $7.60 on 6-18-2008 - up a large $.43 on the week. In the last five years SEP corn futures averaged 90.9% of the starting price from 6-4 to 8-22 so the seasonal pattern in this market is negative trend and the average move down would be around ($1.11) so the purchase of the $7.00 put option could end up showing little profit BUT you are locking in a good profit level and should do this due to the CFTC and Index fund situation.

NEW CROP CORN AND SORGHUM:  As of 5/12/2008 Target Futures Prices for CORN NC pricing on DEC 2008 futures are $5.80 for 70% pricing and $6.50 for moving to 80% priced. CORN DEC 2008 futures were $7.80 on 6/18/2008.

Bring 2008 NC sales of corn or sorghum current with the above levels as soon as possible. The later plantings, slow emergence, flood concerns, lower 2008/2009 U.S. carryout level, nitrogen loss and/or inability to get nitrogen on in some areas are bullish factors for this market but that could all get swept away by fund selling should the CFTC make rapid changes on the swaps positions held by the Index Funds. The USDA acreage estimate for 2008 of 86 million acres could drop by 2 to 4 million acres due to wet weather problems in a future report such as the June 30th acreage report. Cash sales up to 50% of your expected 2008 production and/or a MIN/MAX program of buying a DEC 2008 $7.20 put for a cost of ($.60) and selling a $9.50 DEC 2008 corn call for a return of $.40 could be done in place of cash sales - BUT - you are subject to margin calls with a MIN/MAX plan. Move to 100% price protected on 2008 NC corn and sorghum now with the use of put options on the last 50% of the pricing. Put options are fairly expensive but could be used to move to 100% price protected. For a cost of around ($.50) a $7.00 DEC put could be purchased BUT this price is ($.80) out of the money as DEC futures closed on 6-18-2008 at $7.80 - up $.47 on the week. An at the money $7.80 DEC put option had a cost of around ($.90) on 6-18. The last five year average move down from 6-4 to 11-22 on DEC corn futures would be for a move down of ($1.25). This means that a purchase of a $7.00 DEC put option for may make some money as well as locking in a very good profit - AND REMEMBER - we are not in normal times and prices could fall sharply if the Index funds are forced to liquidate some of their long positions due to the CFTC pressure to reign in their activities. Do not get any pricing done on any part over 50% of your 2008 crop with methods that cap the potential for upward price movement (short futures hedges, a MIN/MAX plan, or cash sales). We want to leave the top open in case the U.S. ends up with even less 2008 acres and/or the U.S. or China see smaller crop sizes as the recent rise in futures prices indicates the market expects. REMEMBER THAT IT NEVER HURTS TO SELL AT A PROFIT.

As of 5/12/2008 Target Futures Price for DEC 2009 CORN NC pricing is $5.75 for 40% of the crop. CORN DEC 2009 futures were $6.85 on 6/18/2008.

As of 5/12/2008 Target Futures Price for DEC 2010 CORN NC pricing is $5.75 for 40% of the crop. CORN DEC 2010 futures were $6.72 on 6/18/2008.

Obtaining bids for 2009 and 2010 from grain elevators may be difficult and some are concerned about the input costs that producers may face if the current rapid rise in costs continues. It is our feeling that the current price levels of DEC 2009 and DEC 2010 futures are attractive enough to consider pricing through cash sales or a MIN/MAX program 40% to 50% of your production (for those who do not want margin calls - make cash sales - IF - you can find a bid with a reasonable basis). A MIN/MAX plan of buying a $6.50 DEC 2009 put for around ($.91) and selling a $9.00 DEC 2009 call option for a net return of $.56 would lock in a net futures floor of $6.15 ($6.50 put + ($.35) net cost) and leave the ceiling wide open to the $8.65 futures level ($9.00 + ($.35) cost). This could have margin calls as the market moves towards the $9.00 price level - BUT - look at the added profit the entire farm is achieving because only up to 50% of the crop should be priced using this method - in combination with any other cash sales or short futures hedges. This had a cost of around ($.35) on 6-18-08. Do NOT get over 50% priced at the current time on the 2009 or 2010 crops with anything that places a ceiling on price (short hedges, cash sales, MIN/MAX.). This same plan could be done on DEC 2010 corn options with the purchase of a $6.40 put for a cost of around ($1.06) and selling a $8.50 DEC 2010 call for a return of $.77 for a net cost of ($.29) and a futures floor of $6.10. This should be considered on up to 40% of your expected 2010 production.

Soybeans: Low U.S. stocks and potential for lower yields due to planting delays

OLD CROP SOYBEANS: As of 5/12/2008 the MDI Target Futures Prices for SOYBEANS OC pricing on JUL 2008 futures are $13.60 for 90% pricing and $14.00 for moving to 100% priced. SOYBEANS JUL 2008 futures were $15.46 on 6/18/2008.

OC soybean pricing should be brought up to 100% with cash sales on 90% of the crop and any remaining share of the crop should have put option protection in place to move to the 100% priced level due the possible shift of corn acres to soybeans. A SEP soybean $13.80 put for a cost around ($.50) a bushel provides good protection but is ($1.75) out of the money with SEP soybean futures closing at $15.45 on 6-18-2008 - up $.32 on the week. The last thirty-eight years saw SEP soybean futures average 99.5% of the starting price from 6-4 to 8-22 and an average % move down would be to the $12.53 area making this purchase unlikely to return a profit BUT you are locking in a very good floor on the remaining OC on hand to offset the fund liquidation risk.

NEW CROP SOYBEANS:  As of 5/12/2008 Target Futures Prices for SOYBEANS NC pricing on NOV 2008 futures are $12.50 for 50% pricing and $13.50 for moving to 70% priced. SOYBEANS NOV 2008 futures were $15.43 on 6/18/2008.

Bring total 2008 NC pricing of soybeans to our target % of at least 70% priced immediately with at least put option protection. The key to prices in the long-term (other than funds activity) will be how many acres finally get planted to soybeans and if any added acres get shifted from corn due to the several reports of areas that need to be replanted on corn but may shift to soybeans due to time of year we are at. The USDA estimate of 74.8 million acres was the same as in their March 31st report but acres could still go up. Cash sales of up to 40% of your expected 2008 production can be made (even with the wider than normal basis in most locations). Put options are expensive as witnessed by the cost of ($.80) on a $13.80 NOV soybean put that is out of the money by ($1.63) as NOV futures were priced at $15.43 on 6-18-2008 - up $.34 on the week. The thirty-eight year average move down in NOV soybeans from 6-4 to 10-22 was a ($1.44) based on a % move down from the starting price that date. Those wanting to just spend ($.50) for put protection would need to look at buying a $12.80 put which is ($2.63) out of the money ($15.43 - $12.80) and means the market would have to drop ($3.13) before a net return is realized - more than a normal price drop but possible this year - IF - acres increase significantly or long fund liquidation occurs in a quick manner. We want to leave the top open on at least 50% of the 2008 crop in case the U.S. has crop problems because the ending carryout will remain tight and the buffer of the South American crops may not come to pass. REMEMBER THAT IT NEVER HURTS TO SELL AT A PROFIT.

As of 5/12/2008 Target Futures Price for NOV 2009 SOYBEANS NC pricing is $12.50 for 40% of the crop. SOYBEANS NOV 2009 futures were $14.70 on 6/18/2008.

As of 5/12/2008 Target Futures Price for NOV 2010 SOYBEANS NC pricing is $12.50 for 40% of the crop. SOYBEANS NOV 2010 futures were $14.82 on 6/18/2008.

MDI would like to see up to 50% of your 2009 and 2010 soybean crop price protected due to the probable increase in acres that could occur due to the high prices and profit levels. If you are concerned about making cash sales of 20% (our recommended level) due to potential input cost increases, then you could look at a MIN/MAX plan of buying a $13.00 NOV 2009 soybean put for a cost of ($1.38) and selling a $20.00 NOV 2009 soybean call for a return of $1.30 to move to no more than 50% of your total expected production - note that this could involve margin calls and the cost of this was around ($.10) on 6-18-2008. Short futures hedges of 30% of the 2010 crop with NOV futures at current levels is encouraged, again you may have margin calls but this would be a good thing as you still have 70% of the crop to price. Cash bids may not be available from many locations for 2009 and 2010 so options or a MIN/MAX plan may be needed. End users will also quote wider than normal basis levels the farther out you go on pricing due to the margin call risk and costs.

WEATHER WATCH: The forecasts for the U.S. show that the last of June could clear up and allow soybean planting to catch back up. In the short term the weather looks to continue to cause production concerns from flooding in many areas of the corn belt. HRW wheat harvest areas could see some weather delays the next couple of weeks. World wide, the weather is generally favorable but Australia has some dry areas. Click here for a link to USDA's weather service.

SUNFLOWERS: Producers could look at pricing up to 70% of their NC production at current price levels. The sunflower contract prices are now $30.40 on OC - unchanged on the week - at the ADM plant at Goodland, KS as of 6-18-2008 and 2008 act of god NC contracts are available at $31.45 a CWT. - up $.50 for the week.

FEED USERS: Look to cover 75% of your third quarter needs with SEP corn futures at $5.60 area which is where a thirty-eight year average percentage move down on SEP futures from 6-4- to 8-22 could move to, otherwise buy only as needed.

CASH BASIS as of 6-17-08 on WHEAT vs. the JULY futures on HRW rail bids in KC were down ($.15) to $.80 over on 11.0 pro and they fell ($.05) to $2.00 over for 13.0 pro while at the Gulf HRW bids were down ($.15) to $.50 over the JULY futures. SRW wheat bids at the Gulf were up $.10 to ($1.65) under the JULY futures. Chicago interior SRW bids were steady at ($1.40) under JULY Chicago wheat futures. CORN basis was ($.50) under the JULY on interior Chicago bids and at the Gulf it was $.27 over JULY - up $.01. SOYBEANS saw basis levels of ($.25) the JULY on interior bids and at the Gulf bids were up $.14 to $.50 over the JULY futures.

CCP/LDP/MLG REVIEW: Nothing to report.

WORLD and OTHER NEWS from DTN or OsterDowJones: The EU is seeing some local flooding in the north but continues to have good moisture for corn. China has experienced some fairly hot weather in their northern crop areas and wet weather has delayed some of their wheat harvesting in southern areas but this is good for their fall crops. Australia need some more rainfall for its wheat crop in some areas. Brazil soybean harvest is wrapping up and a government report showed 60 MMT of production vs. USDA's 61 MMT figure. Some parts of the Argentine wheat growing area need rainfall and they are expecting around 5% less planted wheat acres this year.

EU front month GRAIN PRICES as of 6-18-2008 were: CORN - $8.55 a bushel - up $.44 from a week ago, MILLING WHEAT - $8.95 a bushel - up $.35 on the week, and FEED WHEAT - $6.60 a bushel - unchanged. This compares to JUNE U.S. Gulf prices for corn of $7.76 - up $.37 on the week, Sorghum at $7.20 - up $.20, SRW Wheat bids were $7.39 a bushel - up $.35, and HRW at the Gulf was bid at $9.95 - up $.24 on the week. Assuming a freight rate to the EU of $2.75 a bushel this makes corn and sorghum priced well above EU corn and both are also well above the EU feed wheat price. U.S. HRW export wheat prices are now well above the EU milling wheat price on a fob basis but SRW bids are much lower. Soybeans were at $16.10 a bushel fob the Gulf for JUNE shipment - up $.46 on the week.

USDA's JUNE 10th U.S. crop report MDI SUMMARY: WHEAT: acres for 2008/2009 in the U.S. were left at 63.8 million, harvested acres at 88.25% or 56.3 million acres, with a .7 increase in the U.S. yield to 43.2 bushel per acre for a 2008 U.S. wheat crop of 2.432 billion bushel (up 40 million). Exports rose 25 million to 1.000 billion bushel (rollover of 07/08 sales), domestic seed use is at 84 million, feed and residual use rose 25 to 255 million bushel, and food use is at 960 million. This when combined with imports of 100 million and ending 07/08 wheat stocks of 254 million bushel (up 15) left ending 2008/2009 U.S. carryout at 487 million bushel or a 77.4 day ending supply. World wheat production for 2008/2009 rose tremendously as it was up 6.89 MMT to a record high 662.9 MMT by USDA with the U.S. at 66.2 (up 1.08 MMT), Australia at 24, the EU at 140, Canada at 25, China up a large 5 to 114, India at 76.78, and the FSU nations up 3 to 102.34. World wheat demand rose to a new record 645.98 MMT (up 3.94 MMT), beginning stocks were up a very large 5.12 MMT to 115.14 MMT which caused a 8.07 increase in ending world 2008/2009 stocks to 132.06 MMT or a 74.7 day ending supply (up 4.2 days of supply). This was a SLIGHTLY NEGATIVE wheat report due to the higher U.S. and especially the higher world carryout levels. CORN/SORGHUM: USDA left 2008 planted acres of 86.0 million and is using a harvested % of 91.6% for harvested acres of 78.8 million but they lowered the U.S. yield a large 5 bushel to 148.9 a bushel per acre for a 2008 U.S. corn crop of 11.735 billion bushel (down 390 million). Their 08/09 feed and residual use fell 150 to 5.150 billion, ethanol use was left at 4.000 billion (this is a 1.0 billion over the previous year) making total domestic use of 10.510 billion bushel. Exports were dropped 100 million to 2.000 billion (down 450 million from the reduced 07/08 record high figure of 2.450 billion) and this causes total 2008/2009 demand of 12.510 billion bushel. Combining this with imports of 15 million and the ending 07/08 stocks of 1.433 billion bushel (up on 50 million on less exports) it lowered the U.S. carryout by 90 million to 763 million bushel and to just a 19.6 day ending supply. World 08/09 corn production was lowered by 2.3 MMT to 775.26 MMT with the U.S. down 9.91 to 298.8 MMT, China rose 3 MMT to 153 MMT, Brazil is at 57.0 MMT, Argentina at 23.5, the EU at 56.12, and South African production at 11.5. World corn demand is shown growing by 4.85 to 793.06 MMT, and with beginning stocks being up a very large 11.4 MMT to 121.09 MMT, it raises the 2008/2009 world carryout to 103.29 MMT (up 4.26) or to a 47.6 day ending supply. This was a MOSTLY NEUTRAL corn report due to the increase in ending world stocks offsetting the lower U.S. carryout level. SOYBEANS: USDA left planted acres at 74.8 million for 2008, used a harvested percentage of 98.7% for 73.8 million acres, and with an unchanged 2008 U.S. yield of 42.1 bushel per acre a 2008/2009 U.S production was left at 3.105 billion bushel. Export demand was left at 1.050 billion bushel, crush use fell 10 to 1.840 billion bushel and total domestic use of 2.013 billion. Add in 8 million of imports and with beginning stocks of 125 million bushel (down 20), it lowered ending U.S. stocks for 2008/2009 by 10 million bushel to 175 million bushel or a 20.9 day ending supply. World production for 2008/2009 is shown by USDA at 240.67 MMT (up 21.87 MMT from 07/08) and world use rises 5.92 MMT to 239.44 MMT. Beginning stocks for 2008/2009 were placed at 49.26 MMT, thus ending world stocks for 2008/2009 rise by 1.15 MMT to 50.41 MMT or a slightly above average 76.9 day ending supply (the average since 1990 has been around 74 days of ending supply). The U.S. 2008 crop is shown at 84.5 MMT, Brazil is placed at 64 MMT (up 3 MMT over 07/08), Argentina at 48 MMT (up 1), and the Chinese crop to 16 MMT.. The June crop report should be considered SLIGHTLY FRIENDLY for soybeans due to the lower ending U.S. carryout levels.

USDA made some major changes in June to the USDA 2007/2008 U.S. and world figures. On CORN they showed a major 11.4 MMT increase in ending world stocks due to increased production of 2 MMT in Brazil, a large 6.83 MMT increase in 07/08 Chinese crop, and a 4.7 MMT increase in beginning 07/08 stocks which came from a 6 MMT increase in the 2006/2007 Chinese crop size. They based the higher Chinese figures on a recent report issued by China 's National Bureau of Statistics. USDA raised ending 2007/2008 U.S. corn stocks by 50 million bushel due to a 50 million bushel drop in exports. The strong export sales of SOYBEANS caused 20 million more exports which dropped ending U.S. stocks figure by the same amount. World figures showed very minor changes for 2007/2008. WHEAT ending U.S. stocks rose 15 million on a 15 million decrease in exports. World wheat ending stocks for 07/08 rose 5.12 MMT due to 3.86 MMT increase in Chinese production, a .5 increase in the Argentine crop, and a 2 MMT increase in the beginning 07/08 stocks due to 4 MMT increase in the 06/07 Chinese crop size.

USDA'S WINTER WHEAT CROP CONDITIONS on 6-15-2008 saw G to EX hold steady at 47% and P to VP ratings hold at 22% of the crop for a neutral change. KS had ratings in G to EX totaling 43% (down 5) and P to VP is at 24% (up 4). NE now shows a G to EX rating totaling 64% - up 5 on the week and 8% P to VP (down 1), OK has ratings of 62% in G to EX (up 8) and they show P to VP at 14% (down 6). TX ratings fall 5% to 17% of the crop rated G to EX and P to VP rose 3% to 47%. IL shows 65% rated G to EX (up 4) and 12% P to VP - up 1. CO has a rating of 19% G to EX (up 2) and 47% P to VP (down 3) while MT saw conditions show G to EX of 40% (up 3) and 13% now rated P to VP (down 1) as of 6-15-2008. These are about average ratings for this time of year. Click HERE and look at the year end summary or pull down the menu for individual state reviews. We will update the ratings for states at least once a month on the website and the overall ratings weekly.

OUR PROJECTED CROP REPORT FIGURES ARE FOUND UNDER THE MONTHLY NEWSLETTER.

MDI has many review areas available under the USDA Info. section of the website. We have expanded Grain Estimates reviews that show historical U.S. production levels back to 1970 on wheat, corn, soybeans, sorghum and sunflowers. Click on the links by each of these headings to go to these items. A link to a review of individual state data is also available. We have a Hi/Low review to the Grain Estimates that shows the three highest and lowest figures on each area for grain crops since 1970. We also updated our USDA World Info. review to list the major producing, importing and exporting nations for wheat, corn, sorghum, and soybeans with historical information available back to the early 1960's.

NEW: Users can now ADD LINKS to other internet sites under our Markets, Weather and USDA Links (found under USDA Info.) by a simple process of filling in the name you want to refer to the link as, the new web address, and select the category you want it listed under. These can be deleted with the click of a mouse. Use this to add your own personalized links that are readily accessible from the MDI site. Call us with any questions.

Look under the Monthly Newsletter for government and other news and automatic updates of price movement for the last 30 days, added funds comments and their last four week changes in positions held. We have a SERVICE found under the SPECIAL REVIEWS section of the website called Futures Price Check. Users can select a futures contract to review the historical price movement of (by setting your own start and end dates) and then it takes the current futures price for the futures being reviewed and shows what the Average Move up would be based on the (1 to 38 year historical figures - you choose) under Move Up %, looks at the Move Down % to show where the current price may fall to - IF - history repeats itself, and then shows what the historical ending price vs. today's price has been. This can be useful in setting target prices (move up) for sellers and end users can use the move down to target pricing of feed or ethanol needs. CAUTION, historical figures do not assure that the current situation will perform the same % moves as these markets have been moving up and down in much wider swings than normal due to the increased money in the commodity markets.


Wheat Information and Analysis:

 

WHEAT EXPORTS: Sales for the current marketing year, the week ending 6/12/2008 were excellent at 19.8 million bushel and export sales now stand at 297.0 million bushel vs. 194.2 million a year ago at this time. Sales of around 13.6 million a week are needed assuming donations of 25.0 and with no donations to date. Sales to date have averaged 16.1 per week. Export inspections on shipments the week ending 6/12/2008 were poor at 14.7 million and brought the total inspected to 31.4 vs. 26.1 inspected a year ago. Shipments need to average 18.8 a week assuming 30 million shipped as flour or not inspected. Inspections to date have averaged 17.0 per week. USDA currently projects exports at 1,000.0 million bushel.

 

USDA U.S. REPORT: On 6/10/2008 USDA placed their 2008/2009 wheat yield at 43.2 bushel on 56.3 million acres (88.24%) of the 63.8 million planted acres for a 2008 crop of 2.432 billion bushel. Beginning stocks of 254 million bushel when combined with 2008/2009 domestic food use of 960 million (up 10), seed use of 84 million (down 4), feed use of 255 million (up 195), imports of 100 million (up 5), and 1,000 million (down 265) of exports for a total use of 2,299 million (down 64) leaving ending U.S. wheat stocks for 2007/2008 at 487 million bushel (up 233) which is a 77.4 day ending supply. This is 18.7% below the 599 million fifteen year average. The changes up and down are comparing this year's figures to a year ago.

 

WORLD INFORMATION: On 6/10/2008 USDA showed 2008/2009 world wheat production increasing 52.13 MMT to a total world production figure of 662.9 MMT or 24.357 billion bushel. USDA's world 2008/2009 demand figure rose 23.7 MMT to 646.0 MMT or 23.735 billion bushel and ending stocks rose 16.9 MMT to 132.1 MMT or 4.852 billion bushel for a 74.7 day ending supply - this ranks as the 36 lowest figure in the last 37 years. The lowest ending days of supply in the last 37 years has been 67.6 which was in 2007/2008 .

 

IGC WORLD WHEAT INFORMATION:  On 5/30/2008 IGC showed 2008/2009 world production increasing 46 MMT to a total world production figure of 650 MMT or 23.883 billion bushel . IGC's world 2008/2009 demand figure rose 20 MMT to 632 MMT or 23.222 billion bushel and ending stocks rose 19 MMT to 131 MMT or 4.813 billion bushel for a 75.7 day ending supply - this ranks as the 3 lowest figure in the last 5 years. The lowest ending days of supply in the last 5 years has been 66.8 which was in 2007/2008.

 

CASH BASIS: levels on HRW WHEAT as of 6/17/2008 at the gulf was $0.65 over (up $0.15) and the interior KC_HRW basis was ($0.30) under (unchanged) from 6/10/2008. SRW wheat had a gulf basis of ($1.50) under (up $0.25) and an interior bid at Chicago of ($1.40) under (unchanged). KC Wheat bids on 11.0 protein were $0.75 over (down $0.20) and 13.0 protein was bid at $2.00 over (down $0.05). The bids are based on JUL futures.

 
 

CROP PROGRESS: As of 6/15/2008  WHEAT harvest is 16% complete (up 7) vs. 11% last year and a 19% average. WHEAT heading is 89% complete (up 5) vs. 96% last year and a 95% average.
CROP PROGRESS: As of 6/15/2008  WHEAT SPRING heading is 2% complete (up 2) vs. 9% last year and a 8% average.

 

CROP CONDITIONS on WINTER WHEAT as of 6/15/2008 showed 47% G and EX , 22% P and VP compared to a year ago when G and EX totaled 50% and P and VP totaled 22%.

WINTER WHEAT STATE CROP CONDITIONS Click on the link to the left for information on WINTER WHEAT state crop conditions.

CROP CONDITIONS on SPRING WHEAT as of 6/15/2008 showed 67% G and EX (up 4%), 5% P and VP (up 1%) compared to a year ago when G and EX totaled 85% and P and VP totaled 3%.

SPRING WHEAT STATE CROP CONDITIONS Click on the link to the left for information on SPRING WHEAT state crop conditions.

 

FUNDS: held a net long KCBT WHEAT futures position on 6/10/2008 of 3.09 to 1.00 with 21,983 contracts net long compared to a net long position of 2.97 to 1.00 with 21,569 contracts net long on 6/3/2008. KCBT WHEAT futures/options on 6/10/2008 were net long by a 2.04 to 1.00 margin. Traditional funds held long futures and options of 19,382 and short positions of 9,493 and Index funds held long futures and options positions of 32,007 long vs. 1,685 short positions. This makes total fund positions of a net long 201.1 million bushel which is down by 3.2 from 204.3 million bushel on 6/3/2008.

 

FUNDS: held a net short CBT WHEAT futures position on 6/10/2008 of 1.03 to 1.00 with 2,382 contracts net short compared to a net long position of 1.02 to 1.00 with 2,003 contracts net long on 6/3/2008. CBT WHEAT futures/options on 6/10/2008 were net long by a 1.57 to 1.00 margin. Traditional funds held long futures and options of 53,376 and short positions of 83,661 and Index funds held long futures and options positions of 216,840 long vs. 28,326 short positions. This makes total fund positions of a net long 791.1 million bushel which is down by 22.1 from 813.3 million bushel on 6/3/2008.

 

FUNDS: held a net long MGE WHEAT futures position on 6/10/2008 of 8.40 to 1.00 with 7,525 contracts net long compared to a net long position of 8.55 to 1.00 with 9,299 contracts net long on 6/3/2008. MGE WHEAT futures/options on 6/10/2008 were net long by a 7.90 to 1.00 margin. Traditional funds held long futures and options of 7,960 and short positions of 1,008 and Index funds held long futures and options positions of 0 long vs. 0 short positions. This makes total fund positions of a net long 34.8 million bushel which is down by 8.7 from 43.5 million bushel on 6/3/2008.

 
 

TECHNICALS: RSI's as of Wednesday, June 18, 2008 on JUL KC WHEAT were 81 on the 9 day and 58 on the 30 day. These are Upper range figures.

 

TECHNICALS: RSI's as of Wednesday, June 18, 2008 on JUL Chicago Wheat were 78 on the 9 day and 58 on the 30 day. These are Upper range figures.

 

CURRENT SUMMARY: The wheat market continued its counter seasonal move higher the past week. This was largely tied to the continued strength in the corn and soybean markets which both made new highs the past week. The yield reports out of OK and TX were generally good and harvest is starting in KS. The weather has caused some delays and this may be providing some support for the market. The USDA stocks and acreage reports due for release on June 30th will probably not contain many surprises for the wheat market but any major surprises for corn and/or soybeans could cause higher wheat prices. Some are looking for added U.S. wheat feeding to lower the ending stocks from the current 487 million bushel level. This may happen - IF - corn prices remain strong and SRW wheat prices fall a little more or a larger share of the U.S. crop is of poorer quality. USDA currently projects feed and residual use of 255 million bushel (up 25 from a month ago). The offset to this demand area is the potential for good crops in the EU and FSU nations allowing them to make even more export sales than USDA is currently projecting and lowering the U.S. export figure for 2008/2009 from the current 1.0 billion level. USDA's June crop report should have been considered slightly negative to wheat due to the higher ending world stocks and a small increase in the ending U.S. stocks due to a 40 million higher 2008 U.S. crop estimate. The ending U.S. stocks for 2007/2008 were raised to 254 million bushel or a 39.3 day ending supply - but this figure rises to a 77.4 day ending supply at the end of 08/09 and to 487 million bushel. USDA raised the crop to a large 2.432 billion 2008 U.S. wheat crop which is based on a 88.25% harvested percentage (higher than normal) and a national average 43.2 yield or up .7 from a month ago. Demand rose 50 million in 2008/2009 to 2.299 billion bushel. World wheat production in June was projected by USDA to grow by 6.89 MMT to a record high 662.9 MMT or 24.357 billion bushel vs. the IGC figure of 650 MMT.. USDA shows use of a new record high 645.98 MMT (UP 3.54) or 23.735 billion bushel (632 MMT in the latest IGC report) and ending stocks grew by a large 8.07 MMT or 295 million bushel to 132.06 MMT or a 74.7 day ending supply. Part of the reason for the increase was USDA raising their Chinese production in 06/07 by 4 MMT and 07/08 was increased by 3.86 MMT thus accounting for more than all of the 5 MMT increased 08/09 beginning stocks. The major producing nations in 2008 are shown by USDA to be the EU at 140 MMT (21.1%), China up 5 to 114 MMT (17.2%), the FSU-12 up 3 to 102.34 MMT (15.4%), India at 76.78 MMT (11.6%), the U.S. at 66.2 MMT (9.99%), Australia at 24 MMT (3.6%), and Canada down .5 to 24.5 MMT or 3.7% of the total world production in 2008. You can get a review of all the world producers as shown by USDA by going to our WORLD INFO part of the website (click on the link at the left). India and China are the two largest single producing nations and China is expected to have a similar level of acres but a higher total production figure. China no longer has as low of ending wheat stocks due to the discovery of added bushels there - click on the link at the left and select China , Peoples Republic of from the drop down menu under wheat. MDI feels that U.S. demand could fall as low as 2.250 billion (less exports than USDA is showing and perhaps less wheat feed use) causing stocks to rise back to around 535 million bushel or around a 86.8 day ending supply. The MDI 2008/2009 estimates are found under Prospective Production in the USDA Info. section of the website or click here. In the last ten years when we had this level of ending stocks the average U.S. cash price was $3.40 to $4.25 a bushel. We believe that the low ending world stocks could help keep prices around $3.00 above these levels or well below the current NC cash bids which are over $4.00 higher than these prices for NC bids on HRW. CATCH UP ON PRICING NOW!


Corn and Sorghum Information and Analysis:

CORN EXPORTS: Sales for the current marketing year, the week ending 6/12/2008 were excellent at 13.5 million bushel and export sales now stand at 2,340.6 million bushel vs. 2,015.8 million a year ago at this time. Sales of around 9.3 million a week are needed assuming donations of 7.0 and with no donations to date. Sales to date have averaged 42.3 per week. Export inspections on shipments the week ending 6/12/2008 were poor at 38.2 million and brought the total inspected to 1,912.5 vs. 1,644.8 inspected a year ago. Shipments need to average 48.9. Inspections to date have averaged 43.2 per week. USDA currently projects exports at 2,450.0 million bushel.

 

SORGHUM EXPORTS: Sales for the current marketing year, the week ending 6/12/2008 were poor at 0.1 million bushel and export sales now stand at 246.0 million bushel vs. 130.5 million a year ago at this time. Sales of around 0.4 million a week are needed assuming donations of 15.0 and with donations to date of 7.85. Sales to date have averaged 3.2 per week. Export inspections on shipments the week ending 6/12/2008 were fair at 1.6 million and brought the total inspected to 246.3 vs. 115.1 inspected a year ago. Shipments need to average 1.7. Inspections to date have averaged 5.5 per week. USDA currently projects exports at 265.0 million bushel.

 

USDA U.S. REPORT: On 6/10/2008 USDA placed their 2008/2009 corn yield at 148.9 bushel on 78.8 million acres (91.63%) of the 86.0 million planted acres for a 2008 crop of 11.735 billion bushel. Beginning stocks of 1,433 million bushel when combined with 2008/2009 domestic food use of 1,330 million , seed use of 30 million (down 5), feed use of 5,150 million (down 1000), ethanol use of 4,000 million (up 1000), imports of 15 million , and 2,000 million (down 450) of exports for a total use of 12,510 million (down 450) leaving ending U.S. corn stocks for 2007/2008 at 673 million bushel (down 760) which is a 19.6 day ending supply. This is 51.9% below the 1,398 million fifteen year average. The changes up and down are comparing this year's figures to a year ago.

 

USDA U.S. REPORT: On 6/10/2008 USDA placed their 2008/2009 sorghum yield at 65.9 bushel on 6.3 million acres (85.14%) of the 7.4 million planted acres for a 2008 crop of 0.415 billion bushel. Beginning stocks of 62 million bushel when combined with 2008/2009 imports of 0 million , and 160 million (down 105) of exports for a total use of 420 million (down 55) leaving ending U.S. sorghum stocks for 2007/2008 at 57 million bushel (down 5) which is a 49.6 day ending supply.

 

WORLD INFORMATION: On 6/10/2008 USDA showed 2008/2009 world corn production falling 14.55 MMT to a total world production figure of 775.3 MMT or 30.521 billion bushel. USDA's world 2008/2009 demand figure rose 14.2 MMT to 793.1 MMT or 31.222 billion bushel and ending stocks fell 17.8 MMT to 103.3 MMT or 4.066 billion bushel for a 47.6 day ending supply - this ranks as the 36 lowest figure in the last 37 years. The lowest ending days of supply in the last 37 years has been 42.9 which was in 1973/1974 .

 

WORLD INFORMATION: On 6/10/2008 USDA showed 2008/2009 world sorghum production falling 2.26 MMT to a total world production figure of 61.9 MMT or 2.274 billion bushel. USDA's world 2008/2009 demand figure fell 1.2 MMT to 62.2 MMT or 2.286 billion bushel and ending stocks fell 0.3 MMT to 4.2 MMT or 0.153 billion bushel for a 24.4 day ending supply - this ranks as the 36 lowest figure in the last 37 years. The lowest ending days of supply in the last 37 years has been 20.2 which was in 1972/1973 .

 

IGC WORLD MAIZE INFORMATION:  On 5/30/2008 IGC showed 2008/2009 world production falling 14 MMT to a total world production figure of 763 MMT or 30.038 billion bushel . IGC's world 2008/2009 demand figure rose 13 MMT to 786 MMT or 30.944 billion bushel and ending stocks fell 23 MMT to 95 MMT or 3.740 billion bushel for a 44.1 day ending supply - this ranks as the LOWEST figure in the last 5 years. The lowest ending days of supply in the last 5 years has been 44.1 which was in 2008/2009.

 

CASH BASIS: levels on CORN as of 6/17/2008 at the gulf was $0.27 (up $0.01) and the interior CORN basis was ($0.50) under (unchanged) from 6/10/2008. The bids are based on JUL futures.

 
 

CROP PROGRESS: As of 6/15/2008  CORN Emergence was at 95% (up 6%) vs. 100% last year and a 98% average.
CROP PROGRESS: As of 6/15/2008  SORGHUM planting was 74% completed (up 12%) vs. 81% last year and a 81% average. SORGHUM heading is 17% complete (up 17) vs. 18% last year and a 16% average.

 

CROP CONDITIONS on CORN as of 6/15/2008 showed 57% G and EX (down 3%), 12% P and VP (up 3%) compared to a year ago when G and EX totaled 70% and P and VP totaled 8%.

CORN STATE CROP CONDITIONS Click on the link to the left for information on CORN state crop conditions.

CROP CONDITIONS on SORGHUM as of 6/15/2008 showed 50% G and EX (down 14%), 14% P and VP (up 5%) compared to a year ago when G and EX totaled 76% and P and VP totaled 2%.

SORGHUM STATE CROP CONDITIONS Click on the link to the left for information on SORGHUM state crop conditions.

 

FUNDS: held a net long CBT CORN futures position on 6/10/2008 of 4.01 to 1.00 with 358,826 contracts net long compared to a net long position of 4.28 to 1.00 with 344,150 contracts net long on 6/3/2008. CBT CORN futures/options on 6/10/2008 were net long by a 4.36 to 1.00 margin. Traditional funds held long futures and options of 284,281 and short positions of 65,240 and Index funds held long futures and options positions of 475,731 long vs. 48,379 short positions. This makes total fund positions of a net long 3,232.0 million bushel which is up by 252.2 from 2,979.8 million bushel on 6/3/2008.

 

TECHNICALS: RSI's as of Wednesday, June 18, 2008 on JUL Corn were 100 on the 9 day and 75 on the 30 day. These are Upper range figures. ALERT GRAIN PRODUCERS.

 

CURRENT SUMMARY: The corn futures continued their higher price movement to new all time highs this past week. This was mostly due to the flooding concerns, crude oil holding in the $135 area, a mostly steady dollar, and the positive USDA report that lowered the 2008 U.S. yield by 5 bushel per acre and crop by 390 million bushel. USDA showed ending 2007/2008 U.S. corn stocks growing to 1.433 billion bushel (a 40.4 day ending supply) but ending 2008/2009 stocks project to FALL to 673 million bushel or just a 19.6 day ending supply. USDA left their acres at the March 31st USDA Prospective Acres level of 86 million acres of CORN being planted in 2008. USDA now shows a yield of 148.9 on the 2008 U.S. crop and a 11.735 billion crop but their demand for 2008/2009 fell 150 million and exports fell 100 million to a still above average 2.000 billion bushel. Ethanol use stayed at 4.000 billion bushel - up 1 billion bushel - (vs. a MDI figure of 3.750 billion or up 750 million bushel) and is a key area. The market is focusing the attention on the potential for a 2 to 4 million acre decrease in 2008 U.S. corn acres. The June 30th acreage report will be watched closely along with the quarterly stocks levels. This could easily equate to a 525 million drop in 2008/2009 U.S. corn supply if you include a national average 145 yield and 91% harvested acres. This drop may also be offset by decreased demand during the 2008/2009 marketing year. The recent average export sales have been closer to 1.9 billion bushel or less than the current 2.0 billion USDA figure. If South American production increases in Brazil (as expected) we could easily see 100 to 200 million less export demand from the U.S. . Secondly, ethanol demand is currently placed at 4.0 billion bushel and with the current price of corn, this demand could fall by 250 to 400 million bushel. We have seen several reports where plants are slow to come on line, some plants (mostly those that are paid for), could shut down production and just pay their employees and lose less money than operating or imply operate on existing purchases that were made at much lower prices until these run out. This may not occur in the short term but could easily occur later in the next marketing year. Feed demand could also drop by 50 to 100 million bushel - especially if some flooded acres are planted to sorghum. World stocks at the end of 2008/2009 project to rise 4 MMT from last month to 103.3 MMT or a 47.6 day ending supply. World production fell just 2.3 MMT to 775.3 MMT despite a 10 MMT drop in the size of the U.S. crop. World use rose 4.9 MMT to 793.1 MMT. The carryout level would have gotten smaller - not risen - had it not been for USDA finding 6.83 MMT of added Chinese corn production in 07/08 and 6 MMT of added Chinese corn production in 06/07 which helped raise the beginning 2008/2009 world stocks figure by 11.4 MMT to 121.09 MMT. The major producers in 2008/2009 are the U.S. down 9.91 MMT to 298.08 MMT (38.4% of the total), China up 3 MMT to 153 MMT (19.7%), Brazil at 57 MMT or 7.35%, the EU-27 at 56 MMT or 7.2%, Argentina at 23.5 (3%), Mexico at 23 MMT or 2.97%, and South Africa at 11.5 MMT or 1.5% of the total world production in the 2008/2009 marketing year. China is projected to make virtually no exports in the 2008/2009 year and yet they will end up with 33.5% of the ending stocks vs. the U.S. share of 16.5% ending 2008/2009 world stocks - see link. China no longer has as much of a problem on ending stocks due to the USDA adding in the bushels. The USDA said these additions were based on information obtained from China 's National Bureau of Statistics. The U.S. and China produce nearly 60% of the world's corn and the U.S. is projected to provide 55% of the world 2008/2009 corn exports with Brazil becoming a bigger player in the export market with nearly a 12% share and Argentina projects to provide 17.6% of the world exports. Neither the U.S. or China can really afford lower stocks - UNLESS - the demand is dropped due to high prices or we see a very high 2008 yield which does not appear likely in the U.S. ! DO NOT get over 50% of your 2008 corn or sorghum production priced with anything that caps the ceiling BUT get put options for up to 100% pricing in place NOT on the 2008 crop. The CFTC situation could mean that funds are over 4.0 billion long futures and options and IF the CFTC moves to bring Index funds into compliance with contract limits, prices could fall sharply - at least in the short term. Remember that Congress is proposing a ban on index fund speculation and possibly opening up some CRP acres for 2009 production. These actions could easily press prices lower as we are at record high levels. It is important to note that DEC 2009 corn futures actually fell ($.01) to $6.85 the past week while DEC 2008 futures were up $.47 to $7.80.


 

Soybeans Information and Analysis:

 

SOYBEANS EXPORTS: Sales for the current marketing year, the week ending 6/12/2008 were excellent at 6.3 million bushel and export sales now stand at 1,119.1 million bushel vs. 1,086.5 million a year ago at this time. Sales of around -0.8 million a week are needed assuming donations of 0.0 and with no donations to date. Sales to date have averaged 20.4 per week. Export inspections on shipments the week ending 6/12/2008 were excellent at 12.7 million and brought the total inspected to 991.4 vs. 995.4 inspected a year ago. Shipments need to average 10.8. Inspections to date have averaged 21.9 per week. USDA currently projects exports at 1,110.0 million bushel.

 

USDA U.S. REPORT: On 6/10/2008 USDA placed their 2008/2009 soybeans yield at 42.1 bushel on 73.8 million acres (98.66%) of the 74.8 million planted acres for a 2008 crop of 3.105 billion bushel. Beginning stocks of 125 million bushel when combined with 2008/2009 domestic crush of 1,840 million , and residual use of 82 million (up 80), seed use of 90 million (down 2), imports of 8 million (down 2), and 1,050 million (down 60) of exports for a total use of 3,063 million (up 19) leaving ending U.S. soybeans stocks for 2007/2008 at 175 million bushel (up 50) which is a 20.9 day ending supply. This is 31.0% below the 254 million fifteen year average. The changes up and down are comparing this year's figures to a year ago.

 

WORLD INFORMATION: On 6/10/2008 USDA showed 2008/2009 world soybeans production increasing 21.87 MMT to a total world production figure of 240.7 MMT or 8.843 billion bushel. USDA's world 2008/2009 demand figure rose 5.9 MMT to 239.4 MMT or 8.798 billion bushel and ending stocks rose 1.2 MMT to 50.4 MMT or 1.852 billion bushel for a 76.9 day ending supply - this ranks as the 6 lowest figure in the last 37 years. The lowest ending days of supply in the last 37 years has been 20.2 which was in 1972/1973 .

 

CASH BASIS: levels on SOYBEANS as of 6/17/2008 at the gulf was $0.50 (up $0.14) and the interior SOYBEANS basis was ($0.25) under (unchanged) from 6/10/2008. The bids are based on JUL futures.

 

CROP PROGRESS: As of 6/15/2008  SOYBEANS planting was 84% completed (up 7%) vs. 95% last year and a 94% average. SOYBEANS Emergence was at 71% (up 15%) vs. 90% last year and a 86% average.
CROP PROGRESS: As of 6/15/2008  SUNFLOWERS planting was 77% completed (up 9%) vs. 81% last year and a 84% average.

 

CROP CONDITIONS on SOYBEANS as of 6/15/2008 showed 56% G and EX (down 1%), 10% P and VP (up 2%) compared to a year ago when G and EX totaled 65% and P and VP totaled 9%.

SOYBEANS STATE CROP CONDITIONS Click on the link to the left for information on SOYBEANS state crop conditions.

 

FUNDS: held a net long CBT SOYBEANS futures position on 6/10/2008 of 4.21 to 1.00 with 126,603 contracts net long compared to a net long position of 4.75 to 1.00 with 121,402 contracts net long on 6/3/2008. CBT SOYBEANS futures/options on 6/10/2008 were net long by a 4.71 to 1.00 margin. Traditional funds held long futures and options of 121,987 and short positions of 25,889 and Index funds held long futures and options positions of 180,477 long vs. 12,865 short positions. This makes total fund positions of a net long 1,318.6 million bushel which is up by 44.1 from 1,274.4 million bushel on 6/3/2008.

 

TECHNICALS: RSI's as of Wednesday, June 18, 2008 on JUL Soybeans were 79 on the 9 day and 63 on the 30 day. These are Upper range figures. ALERT GRAIN PRODUCERS.

 

CURRENT SUMMARY: The soybean market continued to rally along with corn due largely to the weather issues and the low ending U.S. carryouts. The NC futures remain very strong even with the chance some corn acres may be getting shifted to soybeans. OC prices are supported by the low ending stocks of 125 million bushel which is just a 15 day ending supply for 2007/2008. The Argentine situation remains in turmoil and could shift added export business to the U.S. . This market remains volatile and should stay that way for most of the year due to the low ending carryout levels projected here in the U.S. and the flooding problems. The June USDA crop report was slightly bullish to soybeans as with the continued use of the USDA Prospective Acres of 74.8 million and with a yield of 42.1 and 98.75% harvested acres a crop of 3.105 billion is projected by USDA. USDA showed demand rising by 19 million from 2007/2008 to 2008/2009 and a total demand in 2008/2009 of 3.063 billion bushel. It is this strong demand figure that held ending stocks of U.S. soybeans from rising as much as MDI figures they could. Stocks are projected to rise 50 million bushel to 175 million (a 20.9 day ending supply) from the very low 125 million bushel (15 day) ending 2007/2008 level. A key thing to remember is that the June 30th acreage figures are based on early June planting intentions and USDA is planning on re-surveying some areas to see if the weather has changed producer plans. They intend to try and get this information in time to use it in the next report. Soybean acres could go up or down although the later planting and flooding problems could cause a lower average yield. MDI is projecting a decrease of 300,000 less acres below what USDA shows will be planted to soybeans. The current demand for 2007/2008 is 3.044 billion bushel but MDI feels it could fall to around 3.035 billion in 2008/2009 if exports decrease due to higher prices and a stronger dollar shifting the demand to South America which is expected to see perhaps a 5% rise in Brazilian production next year. Brazil at 64 MMT (26.6%) and Argentina at 48 MMT (nearly 20%) are projected to produce nearly 47% of the worlds 2008/2009 production with the U.S. at 84.5 MMT or 35%. South America is the buffer with Brazil and Argentina currently projected to hold nearly 82% of the ending 2008/2009 stocks. Put options ONLY should be used on anything over 50% of your 2008 NC pricing due to the low carryout level projected for the U.S. . Remember, we could see imports of soybeans into the U.S. should prices warrant them. Funds are heavily long this market as well and it could see price pressure - IF - the CFTC moves to not only close the swaps loophole but also to make those currently holding contracts in excess of the current limits to get back in compliance in a short period of time.

 

IGC TOTAL WORLD GRAINS:  On 5/30/2008 IGC showed 2008/2009 world production increasing 38 MMT to a total world production figure of 1,712 MMT . IGC's world 2008/2009 demand figure rose 30 MMT to 1,714 MMT and ending stocks fell 1 MMT to 262 MMT for a 55.8 day ending supply - this ranks as the LOWEST figure in the last 5 years. The lowest ending days of supply in the last 5 years has been 55.8 which was in 2008/2009.

 

BOTTOM LINE: THE GRAIN MARKETS WILL REMAIN VERY ACTIVE WITH THE LARGE PRICE SWINGS TO CONTINUE AND THE ONLY WAY TO MARKET IN THESE TIMES IS TO SET PROFITABLE TARGET PRICES AND THEN ACT AND DO NOT LOOK BACK. EVEN THOUGH PUT OPTIONS ARE EXPENSIVE IN HISTORICAL TERMS - LOOK AT THE PROFIT THAT THEY OFFER YOU AND DO NOT LET THIS COST STOP YOU FROM LOCKING IN ATTRACTIVE PROFITS!!! WORLD ECONOMIC EVENTS, OR USDA MOVING TO CLOSE THE CFTC SWAPS LOOPHOLE ON CONTRACT LIMITS MAY OCCUR AND CAUSE SWIFT PRICE DECLINES AS THE FUNDS HOLD LARGE NET LONG POSITIONS AND COULD PUSH PRICES LOWER AT ANY TIME BY SELLING!

Market Data, Inc. P. O.  Box 90 Oberlin, KS  67749-0090 Phone: (785) 475-3322  or  (800) 867-8289 FAX:    (785) 475-3864 Gregory K. Lohoefener, President

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