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1. © Roach Ag Marketing, Ltd. Grain Price Outlook and Market Strategies Presented by: John Roach March 18, 2010

2. © Roach Ag Marketing, Ltd. What fundamentals drove 2009 grain prices?

3. © Roach Ag Marketing, Ltd. #1 - World Soybean Crop down 27.4 million tons = 34% of entire U.S. Crop

4. © Roach Ag Marketing, Ltd.

5. © Roach Ag Marketing, Ltd. #3- On May 17 only 62% of the U.S. corn crop was planted with Illinois at 20%. Beans were 25% planted with Illinois at 1%

6. © Roach Ag Marketing, Ltd. What are the Fundamentals Now?

7. © Roach Ag Marketing, Ltd. Aug forecast +31.5 MMT Nov & Dec +39.4 - Jan +42.58 Feb & March +44.16 MMT

24. © Roach Ag Marketing, Ltd. Tight stocks - loosening with S.A. harvest 2010 supplies becoming surplus Prices likely peaked in January if no U.S. crop problem develops S. America will still be shipping in Dec. hurting new crop bean price Bean Situation and Price Outlook

27. © Roach Ag Marketing, Ltd. FSU-12 Exports 2007-8 – 27.47 MMT 2008-9 – 54.71 MMT 2009-10 – 49.50 MMT U.S. Corn Exports 2007-8 – 69.89 MMT 2008-9 – 51.17 MMT 2009-10 – 55.79 MMT U.S. Wheat Exports 2007-8 – 34.36 MMT 2008-9 – 27.64 MMT 2009-10 – 22.45 MMT

30. © Roach Ag Marketing, Ltd. USDA 2009 World Corn Yields 12/10/09 Non – U.S. 58.9 Bu/Acre World 80.3 Bu/Acre U.S. 162.9 Bu/Acre

48. © Roach Ag Marketing, Ltd. World coarse grain and U.S. ending stocks ample - but likely to grow. Wheat hurting demand U.S. ending stocks likely to increase due to smaller exports and feed offset by + ethanol Livestock producers breaking even or better We still need a big corn crop every year and should have spring strength in 2010 Corn Situation and Price Outlook

49. © Roach Ag Marketing, Ltd. How Should I Market My Crops?

50. © Roach Ag Marketing, Ltd. Focus the majority of sales in the 1 st half of the year March through June is usually best Rule # 1

53. Why Market Grain Aggressively? In the last 21 years, Comparing December Corn Futures in March–June vs. Oct-Nov Dropped Significantly – 15 years Drifted Sideways – 3 years Increased Significantly – 3 years Marketing Ahead is Correct 85% of the Time!

54. What is it worth? The 5 Year Ave. of Dec corn during Oct – Nov $3.07 0.66 The 5 Year Ave. of Dec corn during Roach Mar – June Sell Signals = $3.73

55. What is it worth? 150 bpa X 0.66 = $100 per acre

56. © Roach Ag Marketing, Ltd. Sell only when markets are giving us a Roach Ag Sell Signal Rule # 2

57. December 2007 Corn © Roach Ag Marketing, Ltd. Both Lines Over 75 = Roach Ag Sell Signal

58. © Roach Ag Marketing, Ltd. Roach Ag Sell & Buy Signals Your Digital Thermometer For Prices

59. © Roach Ag Marketing, Ltd. Roach Ag Sell Signals When Both Lines Are Above 75 = Sell Signal

60. © Roach Ag Marketing, Ltd. Roach Ag 2007 Corn Sell Signals 56 Days of Sell Signals ($3.91) and 272 Days Without ($3.71)

61. © Roach Ag Marketing, Ltd. 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

62. © Roach Ag Marketing, Ltd. Make sure you have enough on-farm or other owned storage to hold the balance of a crop using your best ever yields Rule # 4

63. © Roach Ag Marketing, Ltd. Make sure you sell enough in the spring prior to harvest to generate necessary cash-flow from harvest through February Rule # 5

64. © Roach Ag Marketing, Ltd. 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

74. © Roach Ag Marketing, Ltd. December 2009 Corn Sales Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract

87. What About the Grain You Don’t Want to Sell Ahead? Build Storage to hold increasingly larger yields Increased infrastructure will reduce harvest bottlenecks Reduce drying and shrink costs Capture the futures carry available Capture the improvement in basis and competition between bids Space out your workload Avoid extremely low harvest bids Price Risk “ If I sell, Prices might go higher.” Marketing Risk “ If I oversell, I won’t have enough money to buy-back my sales.”

88. Buy Puts on spring Sell Signals Hold them until an August – September Buy Signal It takes advantage of the normal price decline Cash in and wait until next year May also sell Calls if margin calls don’t freak you out – you have to fund Call option loss as it occurs Spend about 30 cents on corn and 50 cents on bean Frequently able to double your money – but will lose premium if prices don’t go down Cover Unsold Grain With Put Options

89. Put Option Charts

90. ��

92. © Roach Ag Marketing, Ltd. Roach Ag Marketing, Ltd. 7601 N. Federal Hwy Suite 265-B Boca Raton, FL 33487 800-622-7628 [email_address] http://www.roachag.com

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