Market Data, Inc. - GREG'S GOSSIP Updated Marketing Advice September 6, 2007

Weekly highlights and USDA news: The HRW K.C. WHEAT market has EXPLODED HIGHER putting in new highs in the K.C., Minneapolis and Chicago markets on concerns about the world situation in the EU (too wet for planting) and lack of recent rainfall in Australia and Argentina along with solid world export demand. We have reached an area where 100% of the 2007 wheat crop should be price protected - ALERT WHEAT PRODUCERS, those wanting to wait for even higher prices should purchase put options for a cost of ($.14) or less in order to lock in very attractive prices on OC futures - see our advice below. NC wheat futures have moved higher and are at a level where at least 20% to 30% pricing should occur - see our targets listed below. Spring wheat harvest is 96% completed so this is providing no harvest pressure to the futures market. The main support for the U.S. wheat prices at current levels is that the EU milling quality wheat price is $10.5 a bushel after hitting a price over $11.00 a bushel the past week. This is the kind of news that the market needs to maintain the new record high prices for this time of year on U.S. futures. MDI projects 2007 production at 2.120 billion and carryout at 385 million (more export demand than USDA is showing) in our Prospective Production review vs. a USDA carryout figure of 404 million and total 2007 U.S. production of 2.114 billion bushel. NO ONE KNOWS when this market will top out BUT prices are very ATTRACTIVE on both OC and NC - take action NOW! The price of CORN in the EU for NOV reached over $9.00 a bushel this past week vs. a gulf U.S. corn price for NOV of $4.01. Ocean freight to the EU on corn or sorghum is currently around $2.20 a bushel - estimated. EU feed wheat prices for NOV are around $7.00 per bushel and the current NOV Gulf price of grain sorghum is $4.45 a bushel (yes $.44 over corn) + freight of $2.20 equals a delivered to the EU price of $6.65 a bushel. This makes U.S. sorghum a bargain vs. EU corn and slightly lower in price than EU feed wheat. The EU will not import U.S. corn due to it being GMO corn. The ProFarmer yield for 2007 was a negative 153.47 bushel per acre yield for a crop of 13.109 billion bushel or above USDA's 2007 U.S. crop of 13.054 billion bushel based on a 152.8 bushel per acre yield. MDI still feels that with current crop ratings about equal to last year when the average U.S. yield was 149.1 bushel per acre and kernel depth and kernel rows were probably better, that these figures are too high. USDA's August crop report yield was based on just ear counts and plant population (which were record high) and not on ear weight which takes into account kernel depth and tip back - BUT - they will factor this into their September crop estimates. These problems could be fairly common due to the hot weather which accelerated the maturity of the corn crop - it sits at 79% dented vs. 79% last year and a 67% average. MDI's corn yield is 150.3 bushel per acre with a 2007 crop of 12.845 billion bushel. Much of the U.S. corn producing areas suffered at least part of the year from slight to moderate drought - see the Drought Monitor maps. If this weather caused poorer grain fill and more tip back, the USDA yield in the August report should be the highest one we see for the rest of the year. Ending 2007/2008 U.S. corn carryout is placed at 1.516 billion bushel by USDA vs. MDI's 1.380 billion figure. It is important to remember that a national average test weight of 57 # would result in a corn crop 5% below a crop with an average test weight of 60 #. The USDA report yield of 152.8 was based on field survey's that showed the highest stalk and ear counts on record in the ten states USDA checked (IL, IN, IA, KS, MN, MO, NE, OH, SD, and WI). Let's assume a stalk and ear count of 1.025% above a year ago when this number was high but ear weights end up 2.5% below a year ago due to the added rush to maturity this year vs. a year ago, the net effect of this is -0-. Applying this to the current corn crop conditions which are equal to a year ago and a 1.005% genetics factor, you come up with a likely yield around 150.3 - not 3.7 bushel higher (152.8 - 149.1) as USDA estimated. USDA will factor in ear weights into their September crop yield which we expect will lower their yield below the current level. Harvest is ahead of schedule and the yield reports we find reported are all over the board. Some are better than expected with some 225 bushel yields reported in central IL but other reports out of southern IL are of yields in the 80 to 140 bushel range. USDA shows a IL yield of 178 bushel. This means that 60% of the IL crop needs to average in the 220 area and the 40% balance in the 120 area to reach USDA's yield of 178. It is too early to tell so watch the harvest results closely for clues to the final U.S. corn crop size. CORN condition ratings on September 2nd held with ratings in the G to EX category of 59% vs. 59% last year and P to VP ratings on corn of 16% vs. 16% last year. These are slightly below average ratings for this time of year and would seem to imply a yield just slightly higher than last year's 149.1 figure but well below where USDA placed it in the August 10th crop report at 152.8 bushel per acre. A lot of the final yield will depend on the level of tip back and kernel depth or test weight of the crop along with field loss from poor stalk quality due to the rapid dry down on much of the crop. SORGHUM ratings fell slightly the past week with G to EX down 1% to a total of 63% vs. 30% last year and P to VP stayed at 9% vs. 38% last year - these are good ratings and support USDA's 70.9 yield or perhaps even a higher yield such as MDI's new estimate of 73.0 for a 489 million crop vs. USDA's August 10th crop of 475 million bushel. Export sales to the EU could add even more export demand to the USDA crop report figures in September. The SOYBEAN crop for the U.S. in 2007 was unchanged by USDA at 2.625 billion with a 2007 U.S. soybean yield of 41.5 bushel per acre. Ending 2007/2008 U.S. soybean carryout is estimated at just 220 million (down 25 from a month ago and down 355 from this year) with a lower carryin for 2007/2008 due to more 06/07 exports. MDI shows production of 2.645 billion with a yield of 41.5 - assuming reasonable August weather and no major rust outbreak - and a 07/08 carryout figure of 260 million bushel. The problems with the Chinese soybean crop (dry and hot weather) may cause added imports by China and has helped to stabilize and improve soybean basis bids in many areas. Rust issues have developed in more places and further north than last year but remain a minor factor at this time. The weather forecast for 6 to 10 days out are causing price pressure for both corn and soybean as many key producing states are shown with better moisture and lower temperatures. The low ending U.S. carryout will keep this market on edge and volatile. The September 2nd U.S. SOYBEAN crop ratings fell 1% to 54% G to EX vs. 59% last year and saw P to VP unchanged at a total of 17% of the crop vs. a 14% figure last year. THE PAST WEEK saw K.C. wheat NC futures rise by $.33 as of 9-5-07 while OC DEC K.C. futures rose a very large $.79 a bushel. NC is lagging in price as many expect world wheat acres to be significantly higher in 2008. Technical buying has continued in the OC wheat futures due to strong world demand and dry weather concerns. Protein premiums on K.C. rail bids have rolled to DEC futures and sit at $.07 over on 11.0 pro and are at $.28 on 13.0 pro. Cash basis bids have improved in some locations but are falling in others due to to the amount of wheat being priced into the market as elevators look to make room for corn and sorghum. The WHEAT market is at attractive levels on OC futures so significant levels of sales or price protection should be made - if you remain bullish use options - see our targets below. CORN futures prices ended September 5th up by $.07 on DEC corn futures for the week. The market only rose slightly due to the varied crop yields being reported and a lag affect of the higher ProFarmer estimate of a 153.47 yield or above USDA's 152.8 figure. Harvest is advancing rapidly in many areas and the early yields in LA and MS were mostly of better than expected yields BUT harvest results in southern IL indicate that the USDA state average for IL may be too high so MDI lowered this yield from 178 to 175 in our review which is found under Grain Estimates (select the crop and then go to the top of the pull down menu and select MDI for our current estimates). Many areas are reporting variable corn yields as more farmers do more in field inspections or harvest their corn crop. Due to this, we feel that USDA and ProFarmer have overstated the U.S. crop yield by around 2.5 to 3.25 bushel per acre. MDI is placing the national U.S. 2007 corn yield at 150.3 bushel for a 12.845 billion crop. SOYBEAN production in 2007 could go up or down from the last USDA estimate as the late season moisture may have improved the yield in some areas but caused more disease and flooded out crops in others and many areas saw hot weather yield reductions the past couple of weeks. MDI is estimating the 2007 U.S. soybean yield at 41.1 bushel for a crop of 2.599 billion bushel. Soybean crop ratings fell and are now below a year ago when the average U.S. yield was 42.7 vs. the current USDA figure of 41.5 for 2007. The John Deere - ProFarmer tour generally found lower pod counts than last year which has helped to support the market but ProFarmer placed their 2007 soybean yield at 42.0 or above the last USDA estimated yield of 41.5 bushel per acre. The tour found soybean pod counts in many acres and if USDA factors those into their September crop report, a lower U.S. yield estimate is likely. The tour found IN with 14.67% lower than the three year average pod counts, in OH counts were equal to the three year average, NE counts were 2.12% below the three year average, while SD counts improved a great deal to 16.4% above the three year average. If these are accurate reflections of crop potential, IN might see a soybean yield of around 43 bushel (85.33% of the 2006, 2005 and 2004 average yield of 50.5 bushel) which is well below USDA's 47 bushel figure. Using this same comparison, the OH crop is equal in pods and their last three year average yield has been 46.33 bushel and USDA currently shows a yield of 44 for OH which may be low. Using these same figures the NE yield at 97.88% of the three year average would be 48 bushel vs. USDA's 50 bushel figure. In SD this same analysis would result in a better than historical average yield of 40 bushel vs. USDA's current 35 bushel figure. In IL the pod counts were 98.07% of the three year average making a potential 2007 yield of around 47.25 bushel vs. USDA's 47 figure. The tour found pod counts slightly higher than the three year average in IA at 101% times a three year USDA historical yield of 50.66 equals a potential 2007 yield for IA of 51 vs. USDA's current 50 figure. In MN the pod counts were lower at just 95.37% of the average times a historical actual yield of 40.66 bushel equals a yield of 39 bushel for 2007. Of course ALL soybean yields may be affected more by late season weather. MDI has updated its historical information contained under the USDA Info. section of the website. We show our crop outlooks compared to the last USDA figures under Prospective Production , and have an expanded Grain Estimates review that shows historical production levels back to 2000 on corn, soybeans, sorghum and sunflowers and we are adding more historical information as each week passes. We also updated our USDA World Info. review where we list the major producing, importing and exporting nations for wheat, corn, sorghum, and soybeans. Click on the links by each of these headings to go to these items and report back to us with what you think of these updates. MARKETING STEPS NEEDING CONSIDERATION NOW ARE: WHEAT: NC 2008 wheat pricing at $6.10 or better on K.C. 2008 SEP or cash in the $5.50 area for 30% to 40% of this crop with a $6.20 SEP 08 closing price on 9-5-07 - up $.33 on the week. NC wheat options are very expensive and thus with a reasonable basis, cash sales vs. the purchase of JUL or SEP wheat options is preferred on up to 40% of your 2008 expected production. OC grain pricing should be moved to 100% of the 2007 crop at a target price of $7.25 on DEC 07 K.C. futures which closed 9-5 at $7.91 - up $.79 - up over $1.10 the past two weeks. Buying a $6.90 DEC K.C. wheat put for a cost of ($.14) could be done to move up to 100% priced on grain you are holding for cash basis improvement. It is IMPORTANT TO REMEMBER THAT IT NEVER HURTS TO SELL AT A PROFIT. CORN/SORGHUM: Target DEC 07 futures at $3.60 for 50% pricing - this closed at 3.46 on 9-5 - up $.06 on the week. You can look to buy a $3.60 DEC 07 put and sell a $4.30 DEC 07 call for a net cost of ($.18) to the buy side to get up to 70% price protection in place (not to exceed 95% of your crop insurance bushels) OR just buy a $3.50 DEC corn put for a cost of $.18 if you do not want any margin calls. Look for 2008 DEC corn futures at $4.00 - to allow around 30% to be priced - this closed at $3.97 - up $.07. One half can be cash sales and one half on a MIN-MAX plan to buy a $3.90 DEC 08 put and sell a $4.90 DEC 08 call for a net cost of ($.18) to the buy side. SOYBEANS: Target pricing of soybeans on NOV 2007 soybean futures of around 70% of your crop with NOV 2007 futures at $8.70 which closed on 9-5-07 at $9.03 - up $.29. Producers could consider a NC MIN/MAX plan on soybeans of buying a NOV 07 $8.80 put and selling a NOV 07 $9.80 call for a net cost of ($.22) to the buy side to get up to 80% price protected on the 2007 crop - not to exceed 95% of your crop insurance bushels. NOV soybean futures HAVE NEVER HIT a price over $9.80 from now to the end of October in the last 35 years and we have still have a record high world carryout of soybeans at the end of 2006/2007. NC producers could move to 90% price protected on their 2007 crop by buying $8.60 NOV soybean puts for a cost of ($.29) or so. This would lock in a futures floor around $8.30 but leave the ceiling wide open on this part of your crop. SUNFLOWERS: Move NC pricing to 50% with a price $6.00 above your local loan rate. Some excellent 2007 Act of God contracts are available with prices at or above $.17 a lb. at many elevators and $.181 a lb at the ADM plant at Goodland, Kansas. FEED USERS: Move third quarter 2007 coverage to 100% with SEP corn at $3.15. Look to buy a $3.30 DEC corn call and sell a $3.00 DEC corn put for a net cost of ($.15) to the buy side to cover around 65% of your last quarter 2007 feed needs. CCP/LDP REVIEW: Nothing to report for now. Check the CCC-509 for 2006/2007 direct payments. WORLD and OTHER NEWS from DTN or OsterDowJones: Wet weather in parts of the EU is hampering early wheat planting efforts while rainfall in the Ukraine and Russia is helping make better planting conditions for their wheat. Australia needs some added rainfall in most areas but has seen some good rainfall in the far northeastern areas. Argentine weather problems (dry areas and lack of rainfall in some areas) could cause a smaller wheat crop from this export supplier. China is seeing some dry weather during soybean crop filling which may be reducing this crop's yield there. USDA's August 10th crop report 2007/2008 world production figures were mostly neutral on wheat, neutral on soybeans but were actually positive for corn. Corn saw world corn production FALL by 5.6 MMT - even with a 5.43 increase in the 2007 U.S. crop size to 331.58 MMT! This was due mostly to a drop in the EU crop of 6.8 MMT to 48.43 MMT and a drop of 1.3 in the FSU-12 crop size to 12.18 MMT. Soybean production in South America should increase due to the current high prices but to what level is the key question - figures of 5% to as much as 10% more acres are being discussed. MDI has the USDA figures entered under USDA REPORT REVIEW < click here for details. USDA's SEPTEMBER 12th U.S. crop report MAY SHOW: WHEAT: 2007/2008 U.S. acreage of 60.5 million, harvested acres at 86.11% or 52.1 million harvested acres, with a U.S. yield of 40.7 bushel per acre (up .1) for a 2007 U.S. wheat crop of 2.120 billion bushel - up 6 million from last month. Exports could increase 25 million to 1.100 billion bushel, domestic seed use of 81 million, feed use should hold at 180 million, and food use at 930 million. This when combined with imports of 100 million and ending 06/07 wheat stocks of 456 million bushel, would leave ending 2007/2008 U.S. carryout at 385 million bushel or a 61.4 day ending supply - 38% below the fifteen year average of 620 million. World wheat production for 2007/2008 could fall 1.4 MMT to 609 MMT. on smaller EU crop, and world wheat demand may grow by 1.5 MMT to 622 MMT. Beginning stocks should hold at 125 MMT which leaves ending world 2007/2008 world stocks down 2.8 to 112 MMT or a 65.8 day ending supply - a record low level. This would be a FRIENDLY wheat report with the U.S. exports sales figure the key. CORN/SORGHUM: USDA could eventually lower their 2007 U.S. corn yield by 2.5 bushel per acre to 150.3 bushel per acre based on late season problems, and should use a 91.92% harvested % or 85.4 million acres of the 92.888 million acres planted in 2007 for a 12.845 billion corn crop. Their 07/08 domestic feed use could fall 50 million to 5.700 billion, ethanol use should stay at 3.400 billion with total domestic use of 10.540 billion. Exports should hold at 2.150 billion due to the high price of wheat in the world and lower U.S. corn prices. Combining these with imports of 13 million and ending 06/07 stocks up 25 million (less exports) to 1.162 billion bushel leaves the U.S. carryout down 136 million to 1.380 billion bushel - a level 4 below the fifteen year average of 1.447 billion and a 39.9 day ending supply. World 07/08 corn production may fall by another 5.5 MMT to 766 MMT with the U.S. at 326.28 MMT (down 5.3), China up 1 to 149 MMT, but the EU-27 down another 1.2 to 47.25 and the FSU-12 at 12.18 MMT.. World corn demand should hold in the 770 MMT area, and with beginning stocks of 100 MMT, it leaves the 2007/2008 carryout down 6.2 MMT to 96 MMT or a 45.5 day ending supply. This would be a FRIENDLY corn report with the U.S. yield estimate the key. SOYBEANS: USDA could lower its 2007/2008 U.S production by 26 million to 2.599 billion bushel based on 64.5 million planted acres, a harvested percentage of 98.15% or 63.3 million planted acres, and a lower 2007 U.S. yield of 41.1 bushel per acre (down .4). Their export demand could fall by 20 million to 1.000 billion bushel, crush use at 1.800 with total domestic use of 1.963 billion. Add in 4 million of imports and with beginning stocks of 575 million bushel, it leaves the ending U.S. stocks for 2007/2008 at 215 million bushel or a - LOW - 26.5 day ending supply. World production for 2007/2008 may fall .3 MMT to 221.3 MMT and with world use up .8 to 234 MMT, beginning stocks of 64.5 MMT, it leaves ending world stocks of 51.8 MMT (up .2) and a still above average 80.8 day ending supply (the average since 1990 has been 70 days of ending supply). The U.S. 2007 crop could fall slightly to 70.75 MMT, Brazil at 61 MMT, Argentina at 47 MMT, and a Chinese crop of 15.2 MMT.. This would be a SLIGHTLY FRIENDLY soybeans report due to the drop in ending U.S. and world carryouts. We look for USDA to lower their 2006/2007 U.S. corn exports 25 million which would raise ending 06/07 U.S. corn carryout to 1.162 billion bushel. Most other U.S. 2006/2007 figures should remain the same. Their 2006/2007 WORLD figures should not have many major changes as well.

Wheat: U.S. prices AGAIN set NEW HIGHS in all wheat futures markets

As of 9/6/2007 Target Futures Prices for KC WHEAT OC pricing on DEC 2007 are $7.50 to $7.75 for 95% to 100%. As of 9/6/2007 Target Futures Prices for KC WHEAT NC pricing on SEP 2008 are $5.90 to $6.10 for 30% to 40%. As of 9/6/2007 Target Futures Price for JUL 2009 KC WHEAT NC pricing is $5.70 for 30% of the crop. As of 9/6/2007 Target Futures Price for JUL 2010 KC WHEAT NC pricing is $5.70 for 20% of the crop. And prices as of 9/5/2007 were: KC WHEAT DEC 2007 futures were $7.91. KC WHEAT SEP 2008 futures were $6.23. KC WHEAT JUL 2009 futures were $5.75.

WHEAT EXPORTS: Sales for 2006/07 the week ending 8/30/2007 were excellent at 26.4 million bushel and export sales now stand at 634.5 million bushel vs. 326.3 million a year ago at this time. Sales of around 10.3 million a week are needed assuming donations of 40.0 and with donations to date of 2.5. Sales to date have averaged 36.7 per week. Export inspections on shipments the week ending 8/30/2007 were excellent at 33.2 million and brought the total shipped to 304.6 vs. 212.7 shipped a year ago. Shipments need to average 19.0 a week assuming 30 million shipped as flour or not inspected. Inspections to date have averaged 22.1 per week. USDA currently projects exports at 1,075.0 million bushel.

USDA U.S. REPORT: On 8/10/2007 USDA placed their 2007/2008 wheat yield at 40.6 bushel on 52.1 million acres (86.12%) of the 60.5 million planted acres for a 2007 crop of 2.114 billion bushel. Beginning stocks of 456 million bushel when combined with 2007/2008 domestic food use of 930 million (up 5), seed use of 81 million , feed use of 180 million (up 46), imports of 100 million (down 22), and 1,075 million (up 166) of exports for a total use of 2,266 million (up 217) leaves ending U.S. wheat stocks for 2007/2008 at 404 million bushel (down 52) which is a 65.1 day ending supply. This is 34.8% below the 620 million fifteen year average.

WORLD INFORMATION: On 8/10/2007 USDA showed 2007/2008 world wheat production increasing 17.42 MMT to a total world production figure of 610.4 MMT or 22.428 billion bushel. USDA's world 2007/2008 demand figure rose 3.3 MMT to 620.5 MMT or 22.799 billion bushel and ending stocks fell 10.1 MMT to 114.8 MMT or 4.217 billion bushel for a 67.6 day ending supply - this ranks as the 37 lowest figure in the last 37 years. The lowest ending days of supply in the last 37 years has been 64.0 which was in 2007/2008.

IGC WORLD WHEAT INFORMATION:  On 8/23/2007 IGC showed 2007/2008 world production increasing 16 MMT to a total world production figure of 607 MMT or 22.303 billion bushel . IGC's world 2007/2008 demand figure rose 4 MMT to 614 MMT or 22.560 billion bushel and ending stocks fell 6 MMT to 111 MMT or 4.078 billion bushel for a 66.0 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 66.0 which was in 2007/2008.

CASH BASIS: levels on HRW WHEAT as of 9/10/2007 at the gulf was $0.40 over (unchanged) and the interior KC_HRW basis was ($0.35) under (down $0.10) from 9/5/2007. SRW wheat had a gulf basis of $0.00 under (unchanged) and an interior bid at Chicago of ($0.85) under (unchanged). KC Wheat bids on 11.0 protein were 7 over and 13.0 protein was bid at 28 over. The bids are based on DEC futures.

CROP PROGRESS: As of 8/5/2007  WHEAT harvest is 94% complete (up 6) vs. 94% last year and a 91% average. CROP PROGRESS: As of 9/2/2007  WHEAT SPRING harvest is 96% complete (up 23) vs. 96% last year and a 80% average.

CROP CONDITIONS  NO CURRENT DATA AVAILABLE. CLICK ON THE HEADING AT THE LEFT FOR HISTORICAL DATA. CROP CONDITIONS on SPRING WHEAT as of 8/12/2007 showed 66% G and EX (down 3%), 13% P and VP (up 2%) compared to a year ago when G and EX totaled 0% and P and VP totaled 0%. 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 9/4/2007 of 4.82 to 1.00 with 44,818 contracts net long compared to a net long position of 5.07 to 1.00 with 46,469 contracts net long on 8/28/2007. KCBT WHEAT futures/options on 9/4/2007 were net long by a 4.22 to 1.00 margin. Traditional funds held long futures and options of 49,990 and short positions of 11,849 and Index funds held long futures and options positions of 34,559 long vs. 118 short positions. This makes total fund positions of a net long 362.9 million bushel which is down by 8.4 from 371.3 million bushel on 8/28/2007.

FUNDS: held a net long CBT WHEAT futures position on 9/4/2007 of 1.47 to 1.00 with 31,901 contracts net long compared to a net long position of 1.39 to 1.00 with 27,976 contracts net long on 8/28/2007. CBT WHEAT futures/options on 9/4/2007 were net long by a 1.15 to 1.00 margin. Traditional funds held long futures and options of 71,375 and short positions of 61,950 and Index funds held long futures and options positions of 190,966 long vs. 9,888 short positions. This makes total fund positions of a net long 952.5 million bushel which is down by 6.6 from 959.2 million bushel on 8/28/2007.

FUNDS: held a net long MGE WHEAT futures position on 9/4/2007 of 20.66 to 1.00 with 11,323 contracts net long compared to a net long position of 23.67 to 1.00 with 12,693 contracts net long on 8/28/2007. MGE WHEAT futures/options on 9/4/2007 were net long by a 21.25 to 1.00 margin. Traditional funds held long futures and options of 12,025 and short positions of 566 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 57.3 million bushel which is down by 6.4 from 63.7 million bushel on 8/28/2007.

CASH OR FUTURES MARKETERS: KC WHEAT Bring OC sales up to 95% with DEC 2007 futures at a $7.50 price and move to 100% priced at $7.75 futures. DEC 2007 closed on 9/5/2007 at $7.91 and historically DEC 2007 traded at or above $7.46 around 0.0% of time in our similar years. Bring NC sales up to 30% with SEP 2008 futures at $5.90 and move to 40% priced at $6.10 futures. SEP 2008 closed on 9/5/2007 at $6.23 and historically SEP 2008 traded at or above $5.91 around 5.2% of time in our similar years.

TECHNICALS: RSI's as of Wednesday, September 05, 2007 on DEC KC WHEAT were 97 on the 9 day and 80 on the 30 day. These are Upper range figures. ALERT GRAIN PRODUCERS.

TECHNICALS: RSI's as of Wednesday, September 05, 2007 on DEC Chicago Wheat were 90 on the 9 day and 76 on the 30 day. These are Upper range figures. ALERT GRAIN PRODUCERS.

CLOSING SUMMARY: The wheat market made new all time highs the past week in all futures markets with DEC K.C. futures reaching $7.91 a bushel (up a very large $.77) at the close on 9-5-2007. It is hard to sustain high price levels as a bull needs fed every day. Egypt made some new purchases from the U.S. and export sales should be good again next week but futures may be due for a correction and were down ($.15) or so in K.C. and around ($.18) in Chicago and Minneapolis on the open on 9-6 only to recover much of the loss in OC futures. Russia has talked about shutting off exports, Australia is lowering their wheat crop estimates due to a lack of rain in some areas and parts of Argentina have been dry (but some moisture is expected) and has talked about limiting new export sales. Added bullish news was India making a fairly large wheat purchase (mostly EU) at a very high price over the objections of some in their country. The news is always the most bullish at the top. Is this the high for the wheat market - I WISH I KNEW ! Many look for 2008 U.S. wheat acres to be up significantly due to the high cost of nitrogen and for more acres to be planted behind soybeans this fall. In reviewing local Oberlin costs for continuous crop HRW wheat vs. carrying the stubble over for planting to corn or sorghum, the current market prices say IT IS A TOSS UP TO plant continuous crop wheat or hold the land for 80 bushel corn or sorghum - both could net around the same with a 40 bushel continuous crop wheat yield and the cash prices available as of 9-4-2007 - use the Risk-Reward section of the website to review your figures. The futures and cash prices shown in this review are for 2008 - it is NOT too early to look to next year. Where you allocate your acres can impact your overall profitability - PLAN AHEAD. CATCH UP ON PRICING NOW - use put options to lock in a floor if you do not want to make cash sales due to the wider than normal basis in some locations but 100% price protection (with at least put options) and 30% to 40% coverage on 2008 wheat production should be made NOW.

Corn & Sorghum: Corn prices slow to follow wheat price advances due to varied yield reports

As of 9/6/2007 Target Futures Prices for CORN OC pricing on DEC 2007 are $3.60 to $3.80 for 80% to 100%. As of 9/6/2007 Target Futures Prices for CORN NC pricing on DEC 2007 are $3.50 to $3.70 for 40% to 50%. As of 9/6/2007 Target Futures Price for DEC 2008 CORN NC pricing is $3.90 for 20% of the crop. As of 9/6/2007 Target Futures Price for DEC2009 CORN NC pricing is $3.90 for 20% of the crop. And prices as of 9/5/2007 were: CORN DEC 2007 futures were $3.46. CORN DEC 2007 futures were $3.46. CORN DEC 2008 futures were $3.97. CORN DEC2009 futures were $4.08.

CORN EXPORTS: Sales for 2006/07 the week ending 8/30/2007 were excellent at 10.2 million bushel and export sales now stand at 2,226.9 million bushel vs. 2,236.3 million a year ago at this time. Sales of around -1.6 million a week are needed assuming donations of 5.0 and with donations to date of 2.5. Sales to date have averaged N/A per week. Export inspections on shipments the week ending 8/30/2007 were excellent at 35.6 million and brought the total shipped to 2,043.4 vs. 2,067.0 shipped a year ago. Shipments need to average 2.1. Inspections to date have averaged N/A per week. USDA currently projects exports at 2,150.0 million bushel.

SORGHUM EXPORTS: Sales for 2006/07 the week ending 8/30/2007 were poor at 0.2 million bushel and export sales now stand at 142.5 million bushel vs. 175.3 million a year ago at this time. Sales of around 0.8 million a week are needed assuming donations of 15.0 and with donations to date of 14.76. Sales to date have averaged N/A per week. Export inspections on shipments the week ending 8/30/2007 were excellent at 2.8 million and brought the total shipped to 147.6 vs. 174.6 shipped a year ago. Shipments need to average 1.0. Inspections to date have averaged N/A per week. USDA currently projects exports at 200.0 million bushel.

USDA U.S. REPORT: On 8/10/2007 USDA placed their 2007/2008 corn yield at 152.8 bushel on 85.4 million acres (91.93%) of the 92.9 million planted acres for a 2007 crop of 13.054 billion bushel. Beginning stocks of 1,137 million bushel when combined with 2007/2008 domestic food use of 1,355 million , seed use of 35 million (up 5), feed use of 5,750 million , ethanol use of 3,400 million (up 1250), imports of 15 million (up 5), and 2,150 million (up 50) of exports for a total use of 12,690 million (up 1315) leaves ending U.S. corn stocks for 2007/2008 at 1,516 million bushel (up 379) which is a 43.6 day ending supply. This is 4.8% above the 1,447 million fifteen year average.

USDA U.S. REPORT: On 8/10/2007 USDA placed their 2007/2008 sorghum yield at 70.9 bushel on 6.7 million acres (85.90%) of the 7.8 million planted acres for a 2007 crop of 0.475 billion bushel. Beginning stocks of 38 million bushel when combined with 2007/2008 imports of 0 million , and 200 million (up 50) of exports for a total use of 445 million (up 140) leaves ending U.S. sorghum stocks for 2007/2008 at 68 million bushel (up 30) which is a 55.8 day ending supply.

WORLD INFORMATION: On 8/10/2007 USDA showed 2007/2008 world corn production increasing 69.34 MMT to a total world production figure of 771.5 MMT or 30.373 billion bushel. USDA's world 2007/2008 demand figure rose 44.6 MMT to 769.5 MMT or 30.293 billion bushel and ending stocks rose 2.0 MMT to 102.2 MMT or 4.025 billion bushel for a 48.5 day ending supply - this ranks as the 34 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 8/10/2007 USDA showed 2007/2008 world sorghum production increasing 4.54 MMT to a total world production figure of 62.1 MMT or 2.283 billion bushel. USDA's world 2007/2008 demand figure rose 4.5 MMT to 62.1 MMT or 2.281 billion bushel and ending stocks rose 0.1 MMT to 4.5 MMT or 0.166 billion bushel for a 26.6 day ending supply - this ranks as the 34 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 8/23/2007 IGC showed 2007/2008 world production increasing 59 MMT to a total world production figure of 755 MMT or 29.723 billion bushel . IGC's world 2007/2008 demand figure rose 42 MMT to 762 MMT or 29.999 billion bushel and ending stocks fell 7 MMT to 96 MMT or 3.779 billion bushel for a 46.0 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 46.0 which was in 2007/2008.

CASH BASIS: levels on CORN as of 9/10/2007 at the gulf was $0.51 (up $0.10) and the interior CORN basis was ($0.45) under (down $0.05) from 9/5/2007. The bids are based on DEC futures.

CROP PROGRESS: As of 9/9/2007  CORN harvest is 8% complete (up 8) vs. 5% last year and a 5% average. CROP PROGRESS: As of 9/9/2007  SORGHUM harvest is 24% complete (up 5) vs. 23% last year and a 21% average. SORGHUM coloring is 81% complete (up 11) vs. 70% last year and a 68% average.

CROP CONDITIONS on CORN as of 9/9/2007 showed 61% G and EX (up 2%), 16% P and VP compared to a year ago when G and EX totaled 59% and P and VP totaled 16%. CORN STATE CROP CONDITIONS Click on the link to the left for information on CORN state crop conditions. CROP CONDITIONS on SORGHUM as of 9/9/2007 showed 65% G and EX (up 2%), 9% P and VP compared to a year ago when G and EX totaled 33% and P and VP totaled 35%. 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 9/4/2007 of 2.26 to 1.00 with 169,436 contracts net long compared to a net long position of 2.45 to 1.00 with 187,764 contracts net long on 8/28/2007. CBT CORN futures/options on 9/4/2007 were net long by a 2.10 to 1.00 margin. Traditional funds held long futures and options of 190,451 and short positions of 90,728 and Index funds held long futures and options positions of 369,540 long vs. 10,064 short positions. This makes total fund positions of a net long 2,296.0 million bushel which is down by 67.1 from 2,363.1 million bushel on 8/28/2007.

CASH OR FUTURES MARKETERS: CORN Bring OC sales up to 80% with DEC 2007 futures at a $3.60 price and move to 100% priced at $3.80 futures. DEC 2007 closed on 9/5/2007 at $3.46 and historically DEC 2007 traded at or above $3.33 around 21.1% of time in our similar years. Bring NC sales up to 40% with DEC 2007 futures at $3.50 and move to 50% priced at $3.70 futures. DEC 2007 closed on 9/5/2007 at $3.46 and historically DEC 2007 traded at or above $3.73 around 10.5% of time in our similar years.

TECHNICALS: RSI's as of Wednesday, September 05, 2007 on DEC Corn were 30 on the 9 day and 57 on the 30 day. These are Lower range figures.

CLOSING SUMMARY: Corn futures rose $.07 the past week largely in sympathy to the large increase in wheat prices. The spread between corn futures and wheat futures is very wide and means even more world demand should get shifted to corn and sorghum. Note that EU feed wheat is priced above U.S. sorghum - $7.00 feed wheat vs. $6.65 or so sorghum. The demand for sorghum for export to the EU is picking up and many may see better basis bids on sorghum in the near future. It is probably wise to take advantage of this basis while it is there. Currently NOV export prices for sorghum are $.40 ABOVE the export price for corn - again the EU demand factor as they will not import U.S. corn due to the GMO issue. DEC 2007 corn will likely stay in a trading range of $3.25 to $3.75 until more is known about the actual 2007 U.S. crop size. End users should use the lower part of this range for covering their needs and producers the upper range to get up to 60% price protected. Some private estimates for the next USDA crop report are FC Stone - a corn yield of 152.9 and a 2007 U.S. corn crop of 13.062 billion (close to USDA's August figure), Allendale is said to have reported a corn yield of 157.1 bushel for this year - a figure we feel is way too high. While we look for a good corn yield (we are projecting the second highest average in history at 150.3 vs. 149.1 last year which was the second highest ever) we do not believe that the average yield can be much over 152 or 154 bushel due to the level of corn on corn, the early and late flooding problems, the early rush to maturity on part of the crop, the early main corn belt states IL and IN reports of varied yields, and the amount of the corn belt that was under drought stress at some time during the growing season. Time will tell this tale on this market. DEC 2008 corn futures should have the least amount of price pressure as with an early harvest, higher fertilizer prices, reports of even higher seed costs next year (everyone wants their slice of the higher prices), and high wheat prices, corn acres could drop dramatically in 2008 which would quickly erode any build up in the 2007/2008 ending stocks. Even if the ending stocks grow to 1.7 billion bushel based on a 154 bushel yield (our top end carryout figure), if demand rises to 13.0 billion bushel next year from 12.690 billion this year, with eighty-five million acres of corn at 91.75% harvested aand a 154 bushel = 12.0 billion bushel of production so the carryout could easily drop back below one billion bushel. We want to limit NC 2008 corn pricing to 30% on any pricing that caps the price, use a MIN/MAX plan on 20% and use just put options on the remaining share of the crop.

Soybeans/Sunflowers: Soybean prices advance on increased crop concerns from weather

As of 9/6/2007 Target Futures Prices for SOYBEANS OC pricing on MAR 2008 are $9.10 to $9.30 for 70% to 80%. As of 9/6/2007 Target Futures Prices for SOYBEANS NC pricing on NOV 2007 are $8.50 to $8.90 for 60% to 70%. As of 9/6/2007 Target Futures Price for NOV 2008 SOYBEANS NC pricing is $9.00 for 40% of the crop. As of 9/6/2007 Target Futures Price for NOV 2009 SOYBEANS NC pricing is $9.00 for 40% of the crop. And prices as of 9/5/2007 were: SOYBEANS MAR 2008 futures were $9.29. SOYBEANS NOV 2007 futures were $9.03. SOYBEANS NOV 2008 futures were $9.18. SOYBEANS NOV 2009 futures were $8.83.

SOYBEANS EXPORTS: Sales for 2006/07 the week ending 8/30/2007 were excellent at 4.9 million bushel and export sales now stand at 1,148.2 million bushel vs. 967.2 million a year ago at this time. Sales of around -2.5 million a week are needed assuming donations of 0.0 and with no donations to date. Sales to date have averaged N/A per week. Export inspections on shipments the week ending 8/30/2007 were excellent at 12.0 million and brought the total shipped to 1,105.3 vs. 934.9 shipped a year ago. Shipments need to average -1.6. Inspections to date have averaged N/A per week. USDA currently projects exports at 1,020.0 million bushel.

USDA U.S. REPORT: On 8/10/2007 USDA placed their 2007/2008 soybeans yield at 41.5 bushel on 63.3 million acres (98.75%) of the 64.1 million planted acres for a 2007 crop of 2.625 billion bushel. Beginning stocks of 575 million bushel when combined with 2007/2008 domestic crush of 1,800 million (up 5), and residual use of 79 million (down 13), seed use of 85 million (up 6), imports of 4 million , and 1,020 million (down 80) of exports for a total use of 2,985 million (down 81) leaves ending U.S. soybeans stocks for 2007/2008 at 220 million bushel (down 355) which is a 26.9 day ending supply. This is 17.9% below the 268 million fifteen year average.

WORLD INFORMATION: On 8/10/2007 USDA showed 2007/2008 world soybeans production falling 14.45 MMT to a total world production figure of 221.6 MMT or 8.143 billion bushel. USDA's world 2007/2008 demand figure rose 9.6 MMT to 233.2 MMT or 8.569 billion bushel and ending stocks fell 12.9 MMT to 51.6 MMT or 1.897 billion bushel for a 80.9 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 9/10/2007 at the gulf was $0.12 (up $0.09) and the interior SOYBEANS basis was ($0.60) under (unchanged) from 9/5/2007. The bids are based on NOV futures.

CROP PROGRESS: As of 9/9/2007  SOYBEANS leaf drop is 32% complete (up 26) vs. 25% last year and a 25% average. CROP PROGRESS: NO CURRENT DATA AVAILABLE

CROP CONDITIONS on SOYBEANS as of 9/9/2007 showed 56% G and EX , 17% P and VP compared to a year ago when G and EX totaled 60% and P and VP totaled 13%. 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 9/4/2007 of 3.39 to 1.00 with 102,598 contracts net long compared to a net long position of 3.59 to 1.00 with 101,151 contracts net long on 8/28/2007. CBT SOYBEANS futures/options on 9/4/2007 were net long by a 5.00 to 1.00 margin. Traditional funds held long futures and options of 114,128 and short positions of 22,825 and Index funds held long futures and options positions of 165,682 long vs. 8,530 short positions. This makes total fund positions of a net long 1,242.3 million bushel which is up by 57.5 from 1,184.8 million bushel on 8/28/2007.

CASH OR FUTURES MARKETERS: SOYBEANS Bring OC sales up to 70% with MAR 2008 futures at a $9.10 price and move to 80% priced at $9.30 futures. MAR 2008 closed on 9/5/2007 at $9.29 and historically MAR 2008 traded at or above $9.07 around 0.0% of time in our similar years. Bring NC sales up to 60% with NOV 2007 futures at $8.50 and move to 70% priced at $8.90 futures. NOV 2007 closed on 9/5/2007 at $9.03 and historically NOV 2007 traded at or above $8.77 around 0% of time in our similar years.

TECHNICALS: RSI's as of Wednesday, September 05, 2007 on NOV Soybeans were 90 on the 9 day and 60 on the 30 day. These are Upper range figures. ALERT GRAIN PRODUCERS.

CLOSING SUMMARY: The soybean market advanced $.29 in price the past week on strength from the wheat market and some reports of late season crop problems. FC Stone placed their soybean yield for 2007 at 42.4 bushel vs. MDI's 41.1 figure and USDA's August figure of 41.5. Allendale is reported to have placed their soybean yield for 2007 at a new record high 43.3 bushel per acre. The crop size with FC Stone is 2.682 billion vs. USDA's harvested acres figure of 63.3 million acres and 2007 crop of 2.625 billion bushel. Current crop ratings are below a year ago when the U.S. soybean yield was 42.7 bushel and seem to support a yield below a year ago. Some early harvest reports are just like corn - some pleasant surprises and some disappointing yields. It is likely to remain that way and the exact crop size could shrink due to the added double crop acres this year which might pull the overall yield average down - remember these are often the later harvested acres. Prices at current levels should encourage added South American acres and some now look for Brazil to harvest well over a 60 MMT crop next year. USDA's current 2007/2008 estimate for them is 61 MMT. The projected low ending 2007/2008 U.S. carryout is a positive - MDI now projects it at 215 million bushel vs. USDA's current 220 figure. The offset to this is the high ending 06/07 U.S. stocks and ending world stocks at a record high level - both are price negative. The market continues to focus on the 2007 U.S. crop size and the jury is still out on this so prices have risen further than corn the past week. Some catch up of pricing needs to be done.

IGC TOTAL WORLD GRAINS:  On 8/23/2007 IGC showed 2007/2008 world production increasing 86 MMT to a total world production figure of 1,653 MMT . IGC's world 2007/2008 demand figure rose 47 MMT to 1,670 MMT and ending stocks fell 17 MMT to 242 MMT for a 52.9 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 52.9 which was in 2007/2008.

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 Copyright 2007 Market Data, Inc. - MDI - all rights reserved. The information contained in these pages is believed to be accurate but is not guaranteed by MDI.  Any action taken as a result of any information or opinions expressed on these pages is taken solely at the liability of the user.  MDI assumes no responsibility or liability for any action taken or not taken as a result of the information contained on these pages or in this website. The Market Data, Inc. website is found at www.marketdatainc.com.

Click here for a printable Adobe Acrobat version of this report. When finished printing, press the BACK arrow on your browser to return to the MDI website.  If you don't have Adobe Acrobat Reader, you can download it free at:    http://www.adobe.com/products/acrobat/readermain.html