Grain Marketing Highlights

Carl German, Extension Crops Marketing Specialist;

Ahead of the Report
USDA will release the September Crop Production and Supply and Demand Reports Friday morning, September 12th. Production estimates will hopefully determine the level of projected ending stocks for the ’08/’09 marketing year. New crop corn and soybean prices have again traded lower this week with old crop SRW wheat following suit. The spreads between the nearby futures contract months and the distant storage months are indicative that remaining grain sales will need to be made into the storage months. The U.S. dollar index has now posted a 10 point gain since July 15th, a turn around from a five year low. The strength in the dollar is expected to slow the demand for U.S. exports. Even so the weekly export sales report, released this morning, was viewed as bearish to neutral for corn, bullish for soybeans, and bullish for wheat.

Simultaneously, commodity speculators have taken to the sidelines over the past two months. World trade activity has also slowed since May ’08 according to the Biffex Panamax Index (sometimes viewed as a measure of world trade activity).

Marketing Strategies
Major uncertainties lie ahead for U.S. agriculture. As stated previously the dynamics of the grain markets are changing. It is difficult to agree with any one analyst’s view on price projections due to the pending questions concerning the banking industry and the credit crunch, a subject that most analysts seem to ignore. Nevertheless, USDA’s September report will form the basis for grain marketing decisions for remaining portions of the ’07/’08 marketing year as well as looking ahead to next year. Currently, Dec ’08 corn futures are trading at $5.37; Nov ’08 soybean futures at $11.76; and Dec ’08 wheat futures are trading at $7.34 per bushel.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.