Grain Analyst Portfolio February Performance Review Program Notes by Dagny Kight, Broker

My Program notes today will review the week of February 25-29 and cover the month's wrap up.

We certainly ended February with fireworks! It has been an incredible month and March might just keep the roller coaster going with Planting Intentions now one month away. With some pullbacks in the market and reversals taken to sync up with a trend, the month's trades clearly show the Program strategy: We took our losers and kept them small. When we caught a winner, we hung on tight!

On February 19, all March contracts were rolled over into May. We watched the market carefully and performed the rollovers during a period of quieter trading when price movement between the months was fairly stable and tight.

CORN

March Corn


May Corn


After riding two nice trends in corn, we opened February with a scratch trade. The lengthy trends were deteriorating into choppy action and Vic tried to capture the price dip that emerged early in the month. Since we are not daytrading or scalping, the downswing proved to be short-lived for our trend-following approach and we didn't quite capture it. The Program took a loss of about a nickel in a trade held only three days.

Trending returned to corn in mid-month and Vic was on top of it! We returned to profit status and closed a dime winner at the rollover.

At today's close, the Program's May corn position is holding a .28 cent floating profit.

WHEAT

March Wheat


May Wheat


Wheat has put Vic on television throughout the world this month with the BBC in the UK, BNN in Canada, and ABC in the US seeking his perspective on the incredible price climb! Clients are a little better able to afford that expensive loaf of bread this month having taken the single largest profit trade the Program has produced.

The Program took its first smack from Wild Wheat with a .24 cent loser closed after just three days. As always, losses to actual accounts were defined by stops set to client preferences.

Vic bounced back with a .38 cent winner held till mid-month. The monthly charts for both March and May show the tough action that hit us with another loss in the middle of the month. The Program took another .24 cent loss.

Trending returned and Vic got revenge! The rollover booked about .12 cents to close out the March contract. We entered our position in the May contract and didn't know the wild ride that we'd just gotten on!

Believing prices to be excessively inflated, we rushed to close client positions when May wheat topped $13 on February 27. We could not get orders filled anywhere above $13 but finally managed to snag mid-$12. Client fills booked profits as high as $2.15 per contract!

Vic ends the month with a call for a possible reversal in wheat next week. At this time, all client positions in wheat are closed. Unless wheat stages another aberrant rally, the Program will likely book a lower profit than clients for this particular trade at the time of reversal. Also, since the Program only reverses and is never stopped out, client losses for the month in wheat are less than what the Program sustained.

At today's close, the Grain Analyst Portfolio's May wheat position is holding a .50 cent floating profit.

OATS

March Oats


May Oats


How many times this month have I heard "As oats go, so goes the market"! The volatility in the market has been strong enough to even give oats a mighty push! It is true you can see the same general pattern in the oats charts as the other grains.

The Program remained in a trend from January through mid-February to take a .23 cent winner in oats. A loser was cut short in two days for a .15 cent hit. Vic struck back with a .10 cent winner at the rollover from March and we remained in profit with the May contract.

At today's close, the Grain Analyst Portfolio's May oats position is holding a .58 cent floating profit.

SOYBEANS

March Soybeans


May Soybeans


I am hearing rumors that soybeans are the next wheat! Just so we're on the right side. Vic started February off strong with a whopping .68 cent winner closed around the middle of the month. Clients booked as much as a dollar before that position showed the reverse movement that indicated a change. Choppy market conditions took nearly 80% of our win away with a .54 cent loss on the next trade. We were able to add to what we'd kept though, with a .28 cent win at rollover time. The current soybean position is climbing high and still moving! As actual positions reached one dollar, some clients have opted to take profit and exit the trade ahead of the Program reversal which is not yet forecast.

At today's close, the Grain Analyst Portfolio's May soybeans position is holding a $1.25 floating profit.

SOYBEAN OIL

March Soybean Oil


May Soybean Oil


Soybean oil is like an unsung hero! With a smoother, more defined trend than the other markets we trade, soybean oil has allowed the Program to remain in the same position since late January. By rollover, we had accumulated an amazing 8.2 points! The May position is getting close to that level!

At today's close, the Grain Analyst Portfolio's May soybean oil position is holding a 7.77 point floating profit.

SOYBEAN MEAL

March Soybean Meal


May Soybean Meal


The meal has shown the choppiest movement of the soy complex. A position opened in late January gave us the second largest profit we've made in meal with 15.7 points booked in mid-month. A follow-up three-day trade put a dent in our profits with a 6.4 point loser. Vic was back with a small winner of 1.7 points at the rollover. The current May position just might be on the way to meeting or even beating our biggest wins in this market.

At today's close, the Grain Analyst Portfolio's May soybean meal position is holding a 12.3 point floating profit.

While not an "official" Grain Analyst Portfolio trade, many clients picked up Vic's February recommendation to buy December corn and hold it throughout the month. Client fills averaged 511. At the close today, December corn was trading at 563! Some clients have taken profits on this trade while others are watching for more Christmas cheer! This trade is not calculated by our documented statistics.

Our performance is tracked by the independent website Collective2.com. Trading a hypothetical $100,000 portfolio, C2 is a simulated trading platform that documents our positions and crunches our numbers. Keep on top of how we're doing day to day by visiting The Grain Analyst Portfolio stats page at Collective2.com.   ¶ 8:38 PM   0 Comments

  Multiple Factors Could Influence Grains at the End of the Month Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 29, 2008
A mixed start is likely this am, down 12-15 in wheat, steady corn and 15 higher in beans. Oil could be roughly 100 points higher while meal's early call is around $2.00 better.

Dalian, China oil futures were limit up again today while May bean futures ended higher and over the $20.00 market supposedly for the first time ever. Our bean market was lower early in the overnight session following the sell off in wheat but beans recovered to end about 15 higher following the sharp rally in Dalian beans and oil. This reflects the influence on the Chinese market on our markets on any given day.

Crude oil rallied to new all time highs yesterday but today it is lower, usually a negative influence for bean oil and corn. China announced they will try to increase oilseed production 7% this year by planting more beans and other oilseeds. Malaysian palm oil jumped to another record today, closing May up 155 ringgit to end at 4005, the first close ever over the 4000 ringgit level. Argentina announced another delay in the reopening of wheat exports, this time from March 17 to April 8. They are doing this to assure adequate domestic supplies. Other countries, such as Russia and Kazakhstan, are restricting wheat exports with very high tariffs for the same reason. Wheat margins are being raised again, starting Sunday night. Usually, raising margins has a bearish influence on the market. Egypt is in the market for wheat today but they are not expected to buy any US origin wheat.

Deliveries were large but not as much as some thought: 400 wheat to Feb14; 1500 corn to Oct 9; 1800 beans to Feb 25; 1300 meal to Feb 27 and 3900 oil to Feb 27. Dreyfus put out 1100 beans and 1400 oil on delivery while ADM took delivery of 500 oil. Argentina will continue to benefit from scattered rain the next several days in the south and early next week in the north. Up to 1.5" of rain benefited southern Brazil during the last 24 hours and more is forecast this weekend. Northern Brazil will see unwanted rain today before drier weather moves in for the weekend.

There could be increased fund trading today as it is the last day of the month and funds sometimes are more active at this time.   ¶ 9:38 AM   0 Comments

  January Crush Report as Expected; Mixed Open Likely Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 28, 2008
Prices were mixed overnight and that is the tentative early call this am: down 20 in wheat, steady/mixed in corn and up 5-7 in beans. Crude oil and gold are higher this am while the $ is slightly lower, a friendly combination for the grains. The Census Bureau January crush was about as expected, 160.3 million bushels. Oil stocks were less than expected, 3.094 billion lbs and meal stocks were slightly below trade ideas, 295,000 short tons. This report is a little supportive for oil and meal, neutral for beans. Weekly export sales were mostly in line with trade estimates, 309,000 tonnes of wheat, a total of 776,000 tonnes of corn between old and new crop years, 584,000 tonnes of beans, 103,000 tonnes of meal and 26,000 tonnes of oil. Oil was higher than trade ideas.

Turkey bought 100,000 tonnes of optional origin wheat, likely non-US, on their tender for 200,000 tonnes. As of today, there is no limit on March grain contracts. Dalian, China bean oil futures were sharply higher but corn, beans and meal were mostly lower today. Malaysian palm oil fell 14 ringgit today.

Wheat volume was a record overnight the night before last and wheat volume yesterday was a record, 261,000 contracts, of which only 13,000 were done in the pit, all the rest being done electronically. Wheat volume yesterday was more than either corn or beans, a rarity for this pit. Index funds held 36% of the open interest in wheat as of February 19. Tomorrow is first notice day for March deliveries. Current estimates are 1500-2500 wheat contracts will be put out on delivery with 0-4000 corn, 1-4000 beans, 1-2000 meal and 3-10,000 oil.

Argentina had scattered rain the last 24 hours, .25-1.25", which was welcome. More is forecast the next couple of days. Southern Brazil should benefit from .3-1.5" today and tomorrow with light rain Saturday and dry weather early next week. Northern Brazil will see unwelcome, scattered rain the next few days. Watch wheat and crude oil for some indication of grains overall direction today.   ¶ 8:38 AM   0 Comments

  Creamed by Wheat Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 27, 2008
A sharply lower start is expected this am with wheat probably limit down (the limit in wheat today is $1.35). This is a technical correction that started overnight. May wheat was sharply higher at one point overnight but sold off to end limit down, in the process trading in a $2.10 range! This extreme correction occurred despite the fact Iraq bought 550-600,000 tonnes of US hard red winter wheat, which was announced this am. The early call in corn is roughly 10-15 lower with beans expected roughly 15-25 down. Gold is higher this am while crude oil and the $ are a little lower, not enough to impact the grains very much this am.

Malaysian palm oil keeps rallying, jumping 72 ringgit. The Dalian, China bean, palm oil and bean oil markets were higher today, which could reduce selling pressure somewhat in these pits today. Japan is a weekly buyer of US wheat but they announced they were skipping this week's tender due to sky-high prices. Russia's Agriculture Minister said Russia will likely extend its prohibitively high export tax on wheat, which was set to end May 1, until July 1. Argentina will see scattered, beneficial rain, favoring the southern part of the country, the next few days. Northern Brazil will see more unwelcome rain later this week, keeping bean harvesting slow. Southern Brazil will benefit from up to 1.5" of rain the next few days before drier weather moves in for the weekend. If wheat locks limit down today, expect growing pressure in corn and beans.   ¶ 8:54 AM   0 Comments

  USDA Numbers Negative for Corn, Wheat; Friendly for Beans Early Session Grain Commentary

Vic Lespinasse's Pre-Opening Commentary was delayed past the opening. We regret the inconvenience.


Prices were generally lower initially but soon turned mixed in average volume trading. The carryover numbers for wheat and corn from the USDA outlook conference this am were negative and are weighing on these pits this am while the carryover for beans was considered friendly and is helping support this pit. Additional support for beans is coming from the USDA announcement this am that China bought 110,000 tonnes of US beans. Crude oil was higher earlier, then broke to lower levels but now it has recovered to just slightly lower, taking pressure off corn and bean oil. Bean oil is the strongest pit on the floor, along with beans, on continued talk of Chinese buying. Of the 27,000 tonnes of bean oil sold in the weekly export sales report this am, 20,000 of that was sold to China while almost half the 631,000 tonnes of beans sold in this morning's report is going to China, lending credence to the ongoing Chinese buying talk. Remember, today is the last day of trading for March options, which expire at the close. Also remember Turkey tenders for 200,000 tonnes of optional origin wheat Tuesday while Iraq is in for wheat Thursday. Starting Monday, Minneapolis March wheat will trade without any limit. It is higher this am, causing Chicago wheat to rally from lower to higher also. Look for additional gains in all pits as the day progresses.   ¶ 10:35 AM   0 Comments

  Potentially Mixed Day in Grains Ahead of USDA Report Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 21, 2008
A higher start is expected in all pits this am, roughly 1-2 wheat, 2-3 corn and 10-15 beans. The outside markets are sending mixed signals to the grains this am with crude oil lower, gold higher, the $ lower and Malaysian palm oil 78 higher. Japan bought 130,000 tonnes of US wheat at their weekly tender.

The USDA outlook conference started today in Washington and continues through tomorrow. Much of the data from this conference is likely to be out tomorrow but already this am the USDA estimated corn acreage at 90 million acres, beans at 71 million and wheat at 64 million. These numbers are not based on a survey - they simply are the USDA's current best guess on 2008 acreage. Earlier this month, the USDA put out some non-survey based guesses: 88 million corn, 71 million beans and 65 million wheat. Compared with these earlier numbers, this morning's guesses are bearish corn, neutral beans and bullish wheat. However, since these are only current guesses, not based on anything more than current USDA judgment, they are not likely to impact the market significantly. The first survey based USDA acreage report will be March 31, their annual planting intentions report, in which they survey thousands of farmers and there intentions to plant wheat, corn, beans and other crops. This March 31 report is a VERY major report and could move the market very significantly, in contrast to this morning's numbers.

Keep an eye on crude oil today for direction in corn and bean oil while watching Minneapolis wheat for direction in our wheat market. Also keep watching for any more announcements from the USDA outlook conference, which could move the market today or tomorrow.

If you missed Vic Lespinasse on ABC News World News last night, the story is now available on online! Click here to read ABC's report on the rising cost of wheat and how it's affecting markets worldwide -- featuring commentary from Vic Lespinasse.   ¶ 9:21 AM   0 Comments

  Monday Holidays Makes Wednesday Turn-Around Tuesday Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 20, 2008
A mixed but mostly slightly lower start is likely this am following mostly lower prices overnight. The early call is 3-4 down in wheat, steady to 1 higher corn and 4-5 down in beans. Crude oil and gold are lower while the $ is higher, a negative background combination for all the grains. Malaysian palm oil fell 1 ringgit today.

Open interest jumped sharply yesterday in corn, up 18,000, and in beans, up 6000, probably due to new longs in these pits. Remember, the USDA outlook conference is Thur-Fri. Usually, most of the statistics from this conference come out on Friday but comments from various USDA officials are liable to move the market either day.

South American weather hasn't been a major market influence lately. Argentina will see only very light, scattered showers the next several days. Brazil will see similar conditions the next several days also. Some bean harvest delaying rains are still possible in northern Brazil, however. No one knows how the weather will turn out this spring but, for what it's worth, China's vice premier said today that spring planting in China is likely to be difficult due to expected bad weather. If the vice premier proves to be prescient, this would be a long term bullish influence for the grain market.

Traders will once again be watching Minneapolis wheat and crude oil for overall market direction today but only if these markets continue to move in an extreme fashion, as they have recently.   ¶ 9:15 AM   0 Comments

  Bulls at the Wheel After Holiday Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 19, 2008
A higher to sharply higher start is likely across the floor this am, up roughly 10-12 in wheat, 5-7 corn and 25 in beans, following big gains overnight. Crude oil and gold are screaming higher while the $ is lower, a bullish combination for all the grains. There is more talk about damage to China's rapeseed crop from severe winter weather with China rumored to be a big buyer of beans, bean oil and palm oil over the last week or so. Malaysian palm oil gained 26 ringgit today. They were higher yesterday as well while we were closed but I haven't been able to find out how much higher. Northern Brazil will have some scattered, unwelcome rain the next few days, slowing bean harvesting. Southern Brazil will welcome scattered rain tomorrow and again over the upcoming weekend. Argentina benefited from rain the last couple of days, .25-1". More is possible today before dry weather on Wed-Fri. Scattered rain is forecast again by this weekend.

Remember, the USDA outlook conference will be held Thur-Fri in Washington. This conference has moved the market in past years and could do so again this time. Japan will tender Thursday for 130,000 tonnes of US wheat. Turkey delayed their 200,000 tonne optional origin wheat tender until Feb 26. Australia's ABARE (their USDA) raised their 2007-08 wheat production estimate from 12.7 million to 13.1 million tonnes, which should have no impact on wheat prices as the crop was still only about half normal size due to severe drought. Look for a strong start and more of the same all day, assuming Minneapolis wheat and crude oil remain very strong.   ¶ 9:25 AM   0 Comments

  Grain Analyst Portfolio: Performance Review for the Week of February 11-15 The Grain Analyst Portfolio closed both winners and losers this week and we finish with Vic Lespinasse repositioning to find the next big trend. Despite the close of losing positions today, the Portfolio ends the week with a significant profit having taken larger winners on Tuesday.

The Program exited a losing position in corn on Monday, taking less than a nickel loss. We end the week holding .11-.12 cents in actual client positions.

We closed a winning position in wheat on Tuesday but took a loss on the reversed position that was closed today. The winner, it should be noted however, was about 40% larger than the loss.

After we booked a .23 cent winner on Tuesday, oats behaved in a very un-oats-like manner, surging against our position on Thursday. The Program reversed, giving back a little over half of our earlier winnings, and oats returned to their usual casual pace, handing us a couple cents on our current open position today.

Remember the 80s duo Hall & Oates? In my tribute to oats today, I wore a "John Oates" tee shirt for casual Friday! My friend owns a company that makes great retro tees! That's the end of my commercial.

Our winning streak in soybeans was broken after taking a third-straight winner on Tuesday. We closed a losing position today but retained about 20% of our week's profits in the beans. The Program position is holding a nickel. Some client fills are small losers at this time because they opted to reverse the position earlier today. Hopefully, we will see another big trend in beans and those few cents will be insignificant!

Today marked three full weeks of a trend in soybean oil that continues to pile up the profit! With today's close the Program is holding nearly 7 full points.

Soymeal handed us a winner and a loser this week with a profit on Tuesday and a loss today, about 45% the size of the winner.

We end the week with an floating profit in open positions nearing $5000 with one full-size contract in each of the six markets traded. This week's closed positions give us an opportunity to see Vic's strategy in action:
Our winners are consistently larger than our losers and that is the key to long-term success of any trading program!

The Chicago Board of Trade is closed for President's Day on Monday; we'll see you again next Tuesday. ---Dagny Kight, Broker   ¶ 3:56 PM   0 Comments

  Wheat Continues to Lead the Grain Market Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 15, 2008
Another higher start is likely this am, roughly 10 in wheat, 2-4 corn and 10-15 beans. Crude oil and gold are higher while the $ is lower, a friendly combination for all the grains. Malaysian palm oil gained 33 ringgit today and Chinese bean oil futures are sharply higher at their Dalian, China futures exchange, a bullish combination for our bean oil market. Argentina supposedly started allowing wheat exports again a few weeks ago but during that time no new wheat exports have been registered, calling into question whether wheat exports really are being allowed again. Now Argentina has officially said they will not allow any more wheat to be registered for export until March 17, making their defacto ban on new wheat exports official, which should lend some support to our wheat market today. The limit in Minneapolis wheat today is $1.35 but it remains 60 cents in Chicago. The American Bakers Association will lead a march in Washington, DC March 12, calling for restrictions on wheat exports and for land to be released early from the Conservation Reserve Program, which would allow for grain to be grown on this land. Neither of these measures is likely to be implemented but it reflects how tight the situation is in wheat , in other words how bullish the situation is. Very welcome precipitation is forecast for the dry areas of the southwest winter wheat belt over the weekend. Argentina had some rain overnight with more light rain forecast today. A dry weekend should be followed by up to .75" of rain Mon-Tue. Southern Brazil will see very light, scattered rain this weekend with mostly dry weather early next week. Northern Brazil had up to .75" overnight and more is forecast today through Monday, none of which is welcome. Watch wheat again today for overall market direction and expect some late long liquidation ahead of the 3 day weekend.   ¶ 8:42 AM   0 Comments

  Weekly Export Figures & Crush Report Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 14, 2008
Grains were sharply higher overnight and a similar start is likely this am, up roughly 25 in wheat, 5 in corn and 10-15 beans. Weekly export sales were delayed this am by computer problems. Only one of the major wire services is reporting any numbers so far, subject to revision: 158,000 tonnes of wheat between the old and new crop years; 932,000 tonnes of corn; 328,000 tonnes of beans; 107,000 tonnes of meal and 24,000 tonnes of oil. The wheat and bean numbers are much less than expected; corn and oil are in line but meal is near the low end of expectations. If these numbers change, I will update them. The NOPA (National Oilseed Processors Association) January crush was 152.4 million bushels, 2 million below trade ideas. Oil stocks were 2.818 billion lbs, about 40 million lbs higher than trade estimates. The NOPA numbers are negative for beans and oil.

Crude oil is higher and the $ is steady this am. Malaysian palm oil gained 91 ringgit and this, combined with the higher crude oil market, should support our bean oil and corn markets. An official with China's Agriculture Ministry says severe winter weather has damaged 40% of China's rapeseed crop, offsetting the 30% increase in rapeseed acreage this season. This could cause increased Chinese vegtable oil imports, which is bullish for bean oil. Japan bought 115,000 tonnes of US wheat at their weekly tender, including 77,000 tonnes of spring wheat, the type traded in Minneapolis. Egypt, Iraq and Tunisia are all in the market for wheat with the Egyptian results due by our opening this am. This could influence our wheat opening, depending on what Egypt does. Argentina will be mostly dry today through Saturday with scattered rain forecast Sun-Tue. Southern Brazil will be mostly dry today through Monday. Scattered rain fell in northern Brazil overnight and more of the same is forecast today through Saturday. Overall, conditions in South America remain favorable except for too much rain in northern Brazil, which is delaying bean harvesting.   ¶ 9:23 AM   0 Comments

  Wheat Continues to Influence Market Direction Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 13, 2008
A lower to sharply lower start is expected this morning, down roughly 20 in wheat, 3-5 corn and 2-4 beans. Wheat is the market leader, especially as long as it continues moving in an extreme manner so traders will continue to watch it for general market direction today. There isn't a lot of news to drive the market this morning. Crude oil is a little lower while the dollar is about steady.

Malaysian palm oil fell 15 ringgit today. India's Trade Secretary said India will consider wheat imports but not until July or August. Minneapolis and KC wheat have a 90 cent limit today but Chicago remains at 60 cents. Open interest keeps climbing in corn, up 7000 yesterday but wheat fell 4000. Argentina will be mostly dry the rest of this week with rain returning early next week. Southern Brazil will remain mostly dry until about Monday, when showers are forecast. Northern Brazil will see scattered, unwelcome rain today through Friday. Beneficial rain is forecast in much of Argentina and southern Brazil the first half of next week. Overall, South American crops are in good shape and likely to stay this way with the possible exception of northern Brazil, where bean harvesting has been delayed by excessive rain.   ¶ 9:23 AM   0 Comments

  Mixed Day Ahead in Grains with Possible Bearish Influences Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 12, 2008
A mixed start is expected this morning following overnight moves: wheat is called 1-3 higher in March but other months are called down as much as 20 cents; corn is expected about 1-3 lower with beans up 3-5. The limit in wheat today remains 60 cents since we were not limit either way in two months of the same crop year yesterday. Open interest jumped sharply in wheat yesterday, up 12,000 lots. Volume was huge also, well over 200,000 lots, possibly record or not far from record volume for wheat.

The crude oil market is lower this am, a negative background feature for bean oil and corn as lower crude oil reduces the incentive to substitute bio fuels for crude oil. Malaysian palm oil is also down today, off 37 ringgit, which is negative for bean oil. The $ is lower, a supportive background influence for all the grains. Egypt is in the market this am for optional origin wheat and results should be known before the opening. If they buy much US wheat, which isn't likely, this would be friendly for our wheat market. Texas wheat is now rated only 9% good to excellent due to ongoing dry weather problems. If it were to stay this way into spring, this would become a bullish influence for wheat but at this time it is only something to be aware of and watch.

China will be back from their lunar New Year holiday tomorrow, which is good for business. Brazil's Agriculture Ministry raised their bean production guess from 58.2 million tonnes last month to 58.5 million tonnes today. Weather in Brazil and Argentina has improved of late. Light rain was seen in southern Brazil the last 24 hours, up to .5". More is possible today before mostly dry weather moves in Wed-Sat. Northern Brazil will see light, scattered rain the next few days, all of which is unwelcome. Argentina was generally dry overnight and more of the same is forecast the rest of this week. The market will be looking for direction this am and we could have a two sided, back and forth trade today.   ¶ 9:23 AM   0 Comments

  All Eyes on Wheat Today! Vic Lespinasse's Pre-Opening Grain Commentary from the floor of the Chicago Board of Trade for February 11, 2008

A mixed start is expected this am, sharply higher to limit up in wheat, down 5-10 in corn and 10 lower in beans. The new limit in wheat is 60 cents in Chicago, KC and Minneapolis. If two months in the same crop year, such as March and May, end limit up today, the limit will expand tomorrow to 90 cents. If two months in the same crop year again end limit up, the limit will expand again, this time to $1.35! It is widely expected this will allow wheat to trade freely in the old crop months, March and May, this week, if not today. Open interest fell sharply Friday in wheat, down 14,000 and corn, down 25,000. Why? - that's a good question, especially since beans didn't have any huge drop in open interest.

Crude oil and the $ are trading back and forth this am, not giving any strong signals to the grains. A senior Indian government official said India is open to more wheat imports later this year, which is supportive to the wheat market. Malaysian palm oil gained 27 ringgit today. Chinese markets remain closed for the lunar New Year holiday. I saw one report this am that said US corn exports to Asia have jumped 2.5 times so far this season with China out of the corn export market. Somar, the Brazilian weather forecaster, thinks wet weather will continue in northern Brazil for the next week or so, further delaying bean harvesting. Somar says northern Mato Grasso state, Brazil's largest bean producing state, has had 7" of rain the first 10 days of this month and the entire month of February only gets 10" on average. Meteorlogix Weather reports a wet weekend in southern Brazil with up to 2" falling. More is forecast today and tomorrow before dry weather moves in Wed-Sat. Northern Brazil had up to .75" over the weekend with moderate rains forecast today through Wednesday. Argentina had .25-.75" over the weekend but mostly dry weather is likely today through Friday. Watch wheat for general market direction. It could be a volatile day if wheat shows any signs of weakness.   ¶ 9:21 AM   0 Comments

  USDA Report Friendly for Beans, Wheat; Slightly Negative for Corn Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 8, 2008
A sharply higher to limit up start is expected this am following huge overnight gains. Additional support could come from triple digit gains in crude oil and the lower $ as well as news India is in the market for 300-400,000 tonnes of Kazakhstan wheat, which would reduce available world wheat supplies. Chicago and KC are seeking to raise their wheat trading limits from 30 to 40 cents starting Feb 12, following Minneapolis.

There is a bearish story in today's Wall Street Journal regarding the damaging environmental impact of biofuels but the world continues to expand its demand for them nonetheless. The US Environmental Protection Agency said there are no plans to slow ethanol mandates that call for further expansion in ethanol use. Argentina had scattered rains the last 24 hours. More is forecast today and tomorrow, .25-.75", which will be very welcome. Northern Brazil will see rain continue in the north but the south will be dry the next couple of days. This pattern will reverse Sun-Mon with rain in the south and dry weather in the north. Southern Brazil expects weekend rains of .5-1.5" with more possible the first half of next week. This rain will be welcome but not the rain in the north. Somar, the Brazilian forecaster, is calling for more unwanted rain in northern Mato Grasso state over coming days but generally dry weather in southern Mato Grasso during this time. Mato Grasso is Brazil's largest bean producing state. Rain in Mato Grasso is delaying bean harvesting now and could negatively impact bean's quality.

The USDA reports this am were modestly friendly for wheat and beans, a shade negative for corn but no big deal either way with most numbers roughly in line. Wheat ending stocks were put at 272 million bushels, corn 1.438 billion and beans 160 million. The USDA did cut biodiesel demand from 3.8 billion lbs to 3.4 billion, which is negative for oil. The speculators sure seem in control of the grains and it doesn't seem to matter what the fundamentals are - we just keep shooting higher.   ¶ 9:06 AM   0 Comments

  A Mixed Day Ahead; No Confirmation of Ethanol Rumor Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 7, 2008
Prices were mixed overnight and that is the early call this am: roughly 20-30 higher wheat, steady/mixed corn and 3-4 lower beans. These calls are highly tentative, however, given the extreme volatility in the market.

There was no confirmation of yesterday's late rumor that the mandated increase in ethanol use would be delayed by 2 years. This would be very bearish and helped break corn late yesterday. The fact corn was mixed overnight suggests this rumor is false. There is a meeting scheduled this am by the US Senate energy and national resources committee to discuss renewable fuel standards. I do not know if this meeting has anything to do with yesterday's rumor but I doubt it so I think the bulls in corn can breathe easier this am. Crude oil is lower and the $ is higher, a negative combination for the grains, especially corn and bean oil.

Volume could be slowed by the Asian lunar New Year holiday across much of the Asia the next several days. Japan bought 81,000 tonnes of US wheat at their weekly tender today. Huge volume was seen in all pits yesterday with big jumps in open interest in corn, up 16,000, and beans, up 7000. Wheat fell 1000 but it was locked up the limit much of the day so new longs couldn't get into this market. Weekly export sales were in line for wheat, 313,000 tonnes old crop and 155,000 tonnes new crop, as well as oil, 41,000 tonnes. Corn sales were slow, 1.030 million tonnes but bean sales were very strong, 1.037 million tonnes, as were meal sales, 366,000 tonnes. Gm announced today that half of their cars will run on ethanol by 2012, welcome news to corn growers and ethanol producers. Argentina had scattered rain the last 24 hours and more rain is forecast today-tomorrow, .3-1.5", which will be very welcome. Northern Brazil has light rain the last 24 hours. More is forecast tomorrow and Saturday. which is not welcome. Southern Brazil will be generally dry the next couple of days. Rain is forecast Sat-Mon, .3-1.5", which will be beneficial.

The Grain Analyst Portfolio is long wheat, corn, beans, meal, oil and oats, short nothing. If March corn ends at or below 505 today, the Program will switch to the short side on the close. It was scary going home last night with that corn busting rumor in mind but I think (hope) we dodged that bullet as there is no confirmation this am and corn was mixed overnight. To survive in volatile markets, trade smaller. One of the best traders ever once said "no one ever went broke under trading" and I agree.   ¶ 8:52 AM   0 Comments

  Grains Hold On to Strength Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 6, 2008

A higher to sharply higher start is likely this am, 30 higher in old crop (March and May) wheat, 3-5 higher corn and 15 up in beans. Minneapolis old crop wheat remains on fire, trading limit up again overnight and inspiring limit gains here in Chicago. Crude oil is a little higher this am and the stock market should be a bit higher also so these markets should not put any early pressure on the grains. Yesterday, it was very impressive how the grains overcame all the bearish influences of the sharply lower stock and energy markets. The turnaround to higher levels in these outside markets this am could be supportive for the grains. New longs are still streaming into the grains, reflected by the ongoing big gains in open interest: wheat jumped 7000 yesterday, corn climbed 13,000 and beans were up almost 8000. The funds were not active in the pits yesterday but they could have been big buyers in the electronic market. Either that or a lot of locals and commission houses are loading up on the long side as the rally continues.

Argentina was generally dry the last 24 hours. Up to 1" of rain is forecast tomorrow-Friday with more over the weekend. Next Monday through Friday is called generally dry. Southern Brazil will be mostly dry the next couple of days with light rain Friday. Heavier rain is forecast Sat-Mon, up to 1.5", which will be welcome. Northern Brazil will see scattered rain today through Friday, which will not be welcome as it is delaying early harvesting and could increase the spread of rust disease. Egypt is in the market this am for optional origin and the results should be out by the opening. This could influence the wheat market today, depending on what Egypt does.   ¶ 8:56 AM   0 Comments

  Bears May Take Over Turn-Around Tuesday Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 5, 2008
A mostly lower start is likely this am in what could be a "turn-a-round Tuesday" type market with prices reversing course from yesterday's sharply higher move. Crude oil and gold are sharply lower while the $ is higher and the stock market is likely to be under strong pressure initially. All these markets will thus be sending bearish signals to the grains this am.

Malaysian palm oil was sharply higher at one point today but ended only 4 ringgit higher, a disappointing performance as far as the bulls are concerned. Open interest jumped again yesterday as the funds kept adding to their already large long positions. Wheat open interest gained almost 3000, corn was up 6000, beans jumped around 5000 and oil increased 2000. The monthly winter wheat crop ratings showed Kansas, the largest winter wheat producing state, had 42% of its crop in good to excellent shape vs 64% a year ago. Oklahoma was 32% vs 58% last year while Texas wheat was only rated 10% good to excellent. Remember, the USDA supply/demand report is out Friday am.

The Ukraine is returning to the export business starting the second half of this month, allowing a total of 1.2 million tonnes of grain to be exported. The Ukraine has not exported any grain since September of 2006. Stats Canada estimated Canadian wheat stocks as of Dec 31 at 15.15 million tonnes vs expectations of 16.9 million. Durum wheat was put at 2.87 million vs ideas of 3.1 million. Canola stocks came in at 6.5 million tonnes, in line with trade ideas. Oat stocks were 2.7 million tonnes vs ideas of 3.1 million. All these numbers are friendly and should lend some support to wheat, oats and bean oil this am.

Argentina was generally dry the last 24 hours and will remain mostly dry the next couple of days before scattered rain moves in Thur-Fri with .25-1" expected. Northern Brazil had light rain the last 24 hours with more expected today through Thursday, which will not be welcome. Southern Brazil will be mostly dry the next few days but rain will pick up later in the week and into the weekend, which will be welcome. Turkey tenders Feb 19 for up to 200,000 tonnes of optional origin soft wheat. Watch the outside markets for general direction in the grains today. Also watch Minneapolis March wheat for guidance in Chicago and KC March wheat.   ¶ 9:02 AM   0 Comments

  Bulls Likely to Dominate Today Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 4, 2008

A higher start is likely across the floor, around 10 in wheat, 5 in corn and 12 in beans, similar to overnight gains. The open interest jumped sharply Friday, perhaps indicating fresh fund money coming into the market. Wheat and bean open interest gained 6000 each while corn shot up 16,000. Malaysian palm oil climbed 113 ringgit today, which could lend some support to bean oil. Crude oil is just a little lower currently, not enough to impact the bean oil or corn markets this am.

South American weather is generally favorable with the exception of northern Brazil, where .5-1.5" fell over the weekend and more rain is forecast this week. This excessive rain could increase the incidence of rust disease and delay early bean harvesting. Southern Brazil saw beneficial light weekend rains, up to .5". Mostly dry weather is forecast the next several days but scattered rain is expected again late this week. Argentina had .1-.6" of scattered weekend rain, which was welcome. Mostly dry weather is likely today through Wednesday but .25-1" of rain is forecast Thursday-Friday.

Just for your information, Reuters did a poll and found analysts currently expect acreage of 63.2 million acres for wheat this year, 89.1 million corn and 70.1 million beans. Last year, wheat acreage was 60.4 million, corn 93.6 million and beans were 63.6 million. The poll also indicated analysts think year end prices will be 7.72 for wheat, 5.13 corn and 11.63 beans. I suspect we will open higher and either stay that way or work even higher overall today.   ¶ 8:50 AM   0 Comments

  Grain Analyst Portfolio: January Performance Review Vic Lespinasse's Grain Analyst Portfolio finished another strong month in January. Since accounts are individually managed, clients are always able to take profits or limit losses as they choose.

The Program's record as tracked by Collective2.com shows a .9% loss for the month. This would be according to "raw" numbers as traded by simulation using the Collective2.com system. Individual positions were able to achieve better results. Remember, the Grain Analyst Portfolio is always in the market, therefore, positions always sustain some adverse movement to reach a price level that indicates a reversal.

CORN
Early January saw the close of a position the Program had held since late November, rolling over from Dec to March and taking over a dollar profit. Clients who exited the position early had the opportunity to take as much as .20 cents above the Program exit price.

The following position, held briefly, was correctly timed and booked a small profit. The position held a profit on one trading day of .25 cents beyond the exit price which could have been taken with the use of a trailing stop.

The current corn position is holding a profit.

WHEAT
Wheat has been a wild ride with frequent limit and near-limit moves. Vic is a trend follower and he will always say when the market is choppy, he will get chopped up! The Program started the month off strong, coming off two huge wins in wheat, only to see most, but not all, of those gains lost in four consecutive wheat trades. The use of stops limited client losses in these positions. The Program ended the month with a very small profit in wheat; we'll see if this is the start of a turnaround.

OATS
The Program closed a significant profit in oats in early January after holding the position for a full month. Clients could have taken about a dime higher than the Program exit price through the duration of the trade. Two very small losses were eclipsed by a win nearly double the value of the two losses combined. A trailing stop could have booked profit nearly .20 cents more than the "official" total. The current position in oats is holding a double-digit profit.

SOYBEANS
The Program continues overall excellent performance in soybeans. Vic's strategy has been able to capture several trends in this market since last October. The beginning of January saw the close of a losing December trade that lost a little less than half the profit earned from the previous trade. As always, stops or protective hedges would have lessened losses on individually-held positions, preserving a greater amount of the previous profits. The Program rebounded with three straight wins including the current position, holding a double-digit profit.

SOYBEAN OIL
The Program has shown the most consistent performance in oil, having taken only one loser worth $138 per contract since October. A briefly-held trade in January hit the Program with its first larger loser in oil but bounced right back with the current position, a winner with a dollar value now worth more than the full previous loss. The use of a trailing stop on this position will book an excellent profit to be sure!

SOYBEAN MEAL
Vic followed up a small loser at the beginning of January with a nice winner that could have delivered up to ten more points in profit on individually-held positions. He called the reversal right on time and is currently sitting on a winner.

The Grain Analyst Portfolio is a full-service, broker-managed futures trading program. Trades are called by Vic Lespinasse, a 35-year veteran trader, working from the floor of the Chicago Board of Trade. Vic's daily Grain Commentary keeps clients informed of the fundamentals that contribute to the trading decisions and lets them know what Vic is planning.

Get more information and start riding the trends! Call Dagny Kight toll free at 866-731-8330 or email dkight@cytradefutures.com

Get more information and sign up at Vic's website, GrainAnalyst.com.   ¶ 2:02 PM   0 Comments

  Grains Could End Week on a High Note Vic Lespinasse's Pre-Opening Grain Commentary from the Floor of the Chicago Board of Trade for February 1, 2008

A higher start is expected in all pits, roughly 10-15 wheat, 5 corn and 10 beans following overnight gains. Outside markets are mixed this am and they haven't moved in an extreme fashion at this time so their influence will be minor, barring any extreme moves.

South Korea bought 100,000 tonnes of US corn, business that probably would have gone to China in previous years. China is now all but out of the corn export business, which is throwing more export business to US corn exporters. US corn export sales so far this marketing year are going at the fastest pace since 1995 as a result. One example: South Korea bought almost 7 million tonnes of US corn so far this marketing year vs just 2.33 million last marketing year at this time and 4.2 million tonnes of US corn for all last marketing year.

Minneapolis March wheat was sharply higher overnight and this supported Chicago wheat overnight also. More severe winter weather is forecast for China, which is already struggling with the worst winter weather in some areas in 50 years. This could do some damage to China's rapeseed crop, which could boost US bean and bean oil exports to China. Argentina had scattered rain overnight but drier weather is forecast there the next several days. Brazil will see light, scattered rain in the south the next several days, which is welcome. Northern areas will see more unwanted rain the next several days, up to 1.5". This will delay early bean harvesting and could increase the risk of rust disease. The energy and equity markets will only influence the grains today if they move extremely. Traders will also watch the Minneapolis wheat market for direction, especially in Chicago wheat.   ¶ 8:48 AM   0 Comments