1. Market Outlook! Rodney Jones OSU NW Area Extension Economist

2. KCBT Wheat, July ‘010

3. ProductionConsumption Ending Stocks U. S. Price Year (Billion Bushels) U.S. Wheat Situation

4. World Wheat Situation (Billion Bushels) ProductionConsumption Ending Stocks Year

5. Wheat Relevant Numbers U.S. Ending Stocks World Ending Stocks Current ProjectionsAverage Billion Bushels

6. Wheat Considerations Despite all the talk, the projected world wheat supply situation has changed very little over the past month Huge U.S. ending stocks projection Very large World ending stocks projection Overall consumption of wheat is not increasing much at all A significant crop failure in the world will be needed to significantly change the fundamental situation. Why the price rally???

7. CBT Corn, Dec. ‘010

8. U.S. Corn Situation ProductionConsumption Ending Stocks U. S. Price Year (Billion Bushels)

9. World Corn Situation (Billion Bushels) ProductionConsumption Ending Stocks Year

10. Corn Relevant Numbers Current Projections Average Billion Bushels U.S. Ending Stocks World Ending Stocks

11. Feedgrain Considerations U.S. ending stocks projections declined relative to earlier projections (now below average, 1.4 bb vs 1.6 bb) World ending stocks projections still above average Usage is increasing over time Current price reflects a U.S. yield of about 163 Yield below 161 would justify a further price rally U.S. matters in world feedgrain complex Why the price rally???

12. CBT Soybeans, Nov. ‘010

13. U.S. Soybean Situation (Billion Bushels) ProductionConsumption Ending Stocks U. S. Price Year

14. ProductionConsumption Ending Stocks Year World Soybean Situation (Billion Bushels)

15. Soybean Relevant Numbers Current Projections Average Billion Bushels U.S. Ending Stocks World Ending Stocks

16. Soybean Considerations Both U.S. and World ending stocks projected to be somewhat above average Consumption is increasing U.S. matters in world oilseed complex Why the price rally???

17. Grain Market Considerations Why the recent rally?? –Weather scares (Europe, Russia, U.S. corn belt, etc) that probably don’t matter much –Outside market influences (oil, other markets, etc.) –Fluctuating value of the dollar –The fact that basis continued to weaken while the futures rallied suggests that the fundamentals are not that positive Funds influence market swings (not all bad, take advantage of opportunities) –When I find it difficult to explain a market move based on underlying fundamentals, I view it as likely a technical over reaction

18. Grain Market Considerations Sell on rallies –If you cant stand the thought that it may go up significantly more on a weather or economic rally, consider options strategies (sometimes costly) If you can “weather the storm” the long term ag commodity outlook is bright (global demand will grow, and at times supplies will be tight, resulting in 2007 style price runups

19. Thank You Questions or Discussion !!!!