ADVICE FOUND IN THE CURRENT REVIEW RELATING TO 2012 and 2013 CROPS:

NC = New Crop or crop in the field or to be planted, OC = Old Crop is crop in the bin

MDI follows pre-harvest Rules of Risk not to get over 90% of the crop that is covered by crop revenue insurance priced ahead of harvest with anything (short futures hedges, a MIN/MAX plan, or cash basis contracts) that has the risk of non-production of the actual crop. Put options can be used to move to 100% price protected on any remaining bushels.

UNDER MARKETING STEPS NEEDING IMMEDIATE CONSIDERATION:

8-23-2012: The rally in the market has given many producers a chance to lock in some of the best prices we have ever seen. Look to catch up on OC pricing and start NC pricing on all commodities after adjusting your expected production for current weather events. If you are very bullish, use just put options or a MIN/MAX plan for pricing - see our targets below.
PRICES ARE ATTRACTIVE ON THE COMMODITIES FOR 50-100% PRICING ON ALL 2012 CROPS, 2013 K.C. WHEAT AND OC 2011 ON HAND - SEE BELOW FOR OUR TARGETS.

As of 8/2/2012 KC WHEAT OC pricing on DEC 2012 futures are $9.00 for 80% pricing and $10.40 for moving to 90% priced, and futures were $9.30 on 8/22/2012.

As of 8/2/2012 KC WHEAT NC pricing on SEP 2012 futures are $9.00 for 80% pricing and $9.50 for moving to 90% priced. KC WHEAT SEP 2012 futures were $9.05 on 8/22/2012.

As of 8/2/2012 Target Futures Price for JUL 2013 KC WHEAT NC pricing is $8.50 for 50% of the crop. KC WHEAT JUL 2013 futures were $8.77 on 8/22/2012.

As of 8/2/2012 Target Futures Price for JUL 2014 KC WHEAT NC pricing is $8.00 for 30% of the crop. KC WHEAT JUL 2014 futures were $8.22 on 8/22/2012.

For those who can handle margin call risk, look at using short futures hedges or a MIN/MAX plan on around 50% pricing on the 2013 crop with JUL 2013 K.C. futures at $8.77 a bushel on the week ending 8-22-2012 - up $.33 on the week. Consider buying a JUL 13 K.C. Wheat $8.70 put and selling a JUL 13 K.C. Wheat $10.00 call for a net cost of ($.33) on up to 50% pricing. JUL 2014 K.C. Wheat futures closed at $8.22 - up $.40 and 30-35% pricing could be considered at this price level for the 2014 crop. Basis levels on 2013 and 2014 bids may be very wide due to the risk of margin calls and the expense it might cause so producers may want to consider a short hedge vs. a cash sale as cash basis levels may improve.

As of 8/2/2012 MDI Target Futures Prices for CORN OC pricing on SEP 2012 futures are $8.00 for 90% pricing and $8.50 for moving to 100% priced, and futures were $8.30 on 8/22/2012.

As of 8/2/2012 Target Futures Prices for CORN NC pricing on DEC 2012 futures are $8.00 for 80% pricing and $9.00 for moving to 90% priced. CORN DEC 2012 futures were $8.35 on 8/22/2012, below is some specific advice we gave on 2012 DEC Corn:

You could move NC 2012 pricing to the 80% level with DEC 12 corn futures at a price on 8-22-2012 of $8.35 - up $.31 from a week ago. The JD tour is finding mostly lower than USDA projected yields. Anything over 50% pricing should be done with just put options due to the low projected ending U.S. and world carryout levels on the last 50%. See our MIN/MAX plan under marketing steps now shown above. A DEC 12 Corn $7.80 Put with a cost of ($.30) or so could be considered. or look to buy a $8.30 DEC 12 Corn put and sell a $9.50 DEC 12 Corn call for a net cost of ($.30) to the buy side on up to 50% of your crop in conjunction with any pricing already done.

As of 8/2/2012 Target Futures Price for DEC 2013 CORN NC pricing is $6.50 for 30% of the crop. CORN DEC 2013 futures were $6.54 on 8/22/2012.

As of 8/2/2012 Target Futures Price for DEC 2014 CORN NC pricing is $6.20 for 20% of the crop. CORN DEC 2014 futures were $5.97 on 8/22/2012.

As of 8/2/2012 MDI Target Futures Prices for SOYBEANS OC pricing on SEP 2012 futures are $16.00 for 70% pricing and $17.00 for moving to 90% priced, and futures were $17.48 on 8/22/2012.

As of 8/2/2012 Target Futures Prices for SOYBEANS NC pricing on NOV 2012 futures are $17.00 for 70% pricing and $18.00 for moving to 90% priced. SOYBEANS NOV 2012 futures were $17.28 on 8/22/2012.

The NC futures on NOV 2012 soybean futures rose to $17.28 a bushel on 8-22-2012 - up $.93. MDI feels pricing can be brought to a 70% level using with a MIN/MAX plan on 50% and puts on the last 50%. Look at buying a $17.30 NOV 12 Put and sell a NOV 12 $19.00 call for a net cost of around ($.50) for any pricing done today.

As of 8/2/2012 Target Futures Price for NOV 2013 SOYBEANS NC pricing is $13.00 for 30% of the crop. SOYBEANS NOV 2013 futures were $13.28 on 8/22/2012.

As of 8/2/2012 Target Futures Price for NOV 2014 SOYBEANS NC pricing is $12.60 for 20% of the crop. SOYBEANS NOV 2014 futures were $12.88 on 8/22/2012.

MDI calls PRICING making cash sales, use of just put options both of which have no margin call risk, or a MIN/MAX plan where you buy a put to place a floor and then sell a call to reduce the cost of the put but this also places a ceiling on the futures price that you can achieve on pricing while raising the floor by the amount of the premium received from selling the call. Another method of pricing is to sell or short the futures market in order to establish a futures floor while waiting to see if a better basis opportunity presents itself and then this can be converted to a cash contract and the futures lifted. This could involve margin calls. On NC pricing we do NOT recommend any combination of a MIN/MAX, short futures hedges and/or cash sales that combined brings your total pricing above 90% of your projected bushels covered by crop insurance unless harvest is almost upon us and your yield is fairly well known. Use put options to cover any pricing above this level.

MARKET DATA, INC. MADE THE FOLLOWING PREDICTION ON PRICES FOR THE YEAR OF 2009:

MONTHLY REVIEW 1-31-2009 - SO WHERE DOES MDI SEE FUTURES PRICES GOING?

On K.C. WHEAT old crop (OC) MAY 2009 futures we look for these to rally to the $6.40 to $6.50 area with an outside top of $6.75.High of $6.40. SEP 2009 K.C. New crop (NC) futures could rally to the $6.85 to $7.15 area with an outside top of $7.50 on any major rally in the corn market – Actual High of $7.37 on 6-1.

On CORN we look for a small acres buying rally on MAY corn futures into the $4.10 to $4.20 area with an outside top end price of $4.50. High of $4.21. The NC DEC 2009 futures could move into the $4.40 to $4.60 area with a reasonable chance for a rally to the $5.00 area on any low acreage figure or weather this summer – Actual High of $4.73 on 6-2. If the U.S. or Chinese crops come under severe stress this year a major rally in corn could occur.

The SOYBEAN market may be a tale of two situations (low 08/09 carryout) vs. (added 2009 acres). On OC MAY 2009 soybean futures we look for a rally to the $10.30 to $10.40 area as very likely with an outside top end rally into the $10.80 to $11.00 area. Price of $11.02 on 5-1. The NC NOV 2009 futures should move into the $10.20 to $10.30 area but will struggle to reach the $11.00 level - IF - the amount of acres gets planted here in the U.S. that several are forecasting – the Price hit $10.90 on 6-11.