south dakota corn growers

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Grain Price Outlook and Market Strategies

South Dakota Corn Growers Association

by John Roach

January 10, 2009

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© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

There will not be enough money to raise crops this big next year

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© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

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© Roach Ag Marketing, Ltd.

World coarse grain ending stocks tight

U.S. ending stocks are tight

Exports off to slow start

Ethanol demand slowing

We still need a big corn crop every year

Price peak due in Mar – June in 2009

Corn Situation and Price Outlook

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© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

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World soybean ending stocks not as tight as corn or wheat, but demand is solid.

US stocks very tight

Look for shrinking 2009 crop in S. America

Prices trying to trend higher

Bean Situation and Price Outlook

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How Should I Market My Crops?

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Chicago December Corn Futures, 1990-2005 average1-

Jan

1-Fe

b 1-M

ar

1-Apr

1-M

ay

1-Ju

n

1-Ju

l

1-Aug

1-Se

p

1-O

ct

1-N

ov

1-D

ec

230

235

240

245

250

255

260

265

approximate dates

cents

per

bus

hel

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Chicago November Soybean Futures, 1990-2005 average1-

Jan

1-Fe

b

1-M

ar

1-Apr 1-

May

1-Ju

n

1-Ju

l

1-Aug 1-

Sep

1-O

ct

1-N

ov

570

575

580

585

590

595

600

605

610

approximate dates

cent

s pe

r bu

shel

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•Focus the majority of sales in the 1st half of the year

•March through June is usually best

Rule # 1

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•Sell only when markets are giving a Roach Ag Sell Signal

Rule # 2

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December 2007 Corn

Both Lines Over 75 = Roach Ag Sell Signal

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Roach Ag Sell SignalsYour Digital Thermometer For Prices

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Roach Ag Sell SignalsWhen Both Lines Are Above 75 = Sell Signal

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Roach Ag 2007 Corn Sell Signals56 Days of Sell Signals ($3.91) and 272 Days Without ($3.71)

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•Figure out the percentage of bushels you are comfortable selling each and every spring and tie that % to the your crop insurance policy coverage level

Rule # 3

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•Make sure you take into consideration what your cash-flow needs will be from harvest through February

Rule # 4

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•Make sure you have enough owned storage to hold the undelivered percentage of a record crop

Rule # 5

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•Split your old crop bushels and new crop contracts into between 3 and 5 increments and sell one increment of each on each Sell Signal

Rule # 6

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•Buy new crop puts on the bushels you do not want to sell on a contract. Decide if puts are insurance or investment

Rule # 7

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•If you see reasons for getting bullish, add additional increments by splitting the bushels again, but don’t quit selling peaks

Rule # 8

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Put Opportunity - Buy Buy Puts on some of the Crop Puts on some of the Crop You Do Not Want to Sell You Do Not Want to Sell on a Cash Contracton a Cash Contract

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

© Roach Ag Marketing, Ltd.

Roach Ag Marketing, Ltd.

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Boca Raton, FL 33487

800-622-7628

jroach@roachag.com http://www.roachag.com