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Bulls are running

The market bulls are running in the grains, with new recent highs in corn going
back to June 2009, with Dec corn nearing $4. The strength in corn is also being
reflected in wheat and soybean markets, as both are running higher as well as
the corn. Soybeans are back above $10 and threatening to run to new highs,
while wheat is confirming higher highs and higher lows by running to new recent
highs today. All of these things are positive technical signs for the market,
and is confirming the idea that bottoms have been formed in grains for the 2009
season.

What is odd is that these lows have come before much grain has been harvested of
corn and soybeans, an unusual situation but then again, we have an unusually bad
harvest weather situation in 2009 thus far. Harvest progress is well behind
normal, and based on October weather thus far, has been nothing but a disaster
as far as harvest goes. Cloudy, cool, rainy weather has dominated the first 3
weeks of October, causing us to effectively lose 3 weeks of time in the 2009
harvest as very little has been accomplished. The few days of harvest that
producers have had has knocked out essentially 17% of the corn and 30% of the
soybeans, but this is far from normal progress efforts by Oct. 21. Typically
46% of the corn and 72% of the soybeans are harvested. It's likely we'll fall
even further behind normal by next Monday, further implicating 2009 as one of
the worst harvests on record.

The risk of loss is most evident on HRS wheat, where significant amounts of
Canadian wheat are as of yet still unharvested. The quality of the remaining
wheat is questionable, and its even going to be questionable whether some will
be harvested at all! These potential harvest losses in quality and quantity are
still being built into the market.

Soybeans also are at great risk, as most fields right now are high moisture
soybeans and the ground is unable to support equipment in many areas. The worst
weather would be a snowstorm now on unfrozen ground, with heavy snow providing a
insulating factor for unfrozen, soggy soils. The snow would cause heavy losses
of beans, and if late enough in the season might not melt again until next
spring. If sloppy wet soils do not freeze, it will be unable to support
combines for harvesting at all this fall. This would be a virtual disaster for
soybean growers, and is the most bullish scenario for the soybean market. The
best case scenario for farmers is freezing cold, sunny weather that would freeze
the ground and allow drying of soybeans, allowing combines to move on frozen,
muddy soils and harvest the remaining crop. But it can't include any snow or
rain or any moisture, as that would prevent the already soggy beans from drying
down to levels that would allow harvesting, and keep soils soggy/wet.

Corn also is threatened, although corn can stand in snow much better than
soybeans, with many pods close to the ground and at risk of being covered by
snow. Harvest losses in corn are much harder to come by, as most ears will hang
on pretty tight to stalks. But even corn can see some harvest losses from
standing in the fields too long, as soggy soils can allow tipping over of corn.
Currently, many corn fields will not support combines, leaving another miserable
corn harvest season ahead.

It's not only the poor harvest weather that is supporting grains. Outside
markets are also supportive, with new recent highs in crude oil and new all time
highs in gold recently. These positive outside markets along with a lower
dollar all are supportive of higher grain prices. We might once again have a
perfect storm this fall for prices, with better prices offered than expected for
this record large corn and soybean crop.

Pro Ag has felt that $4 corn or $10 soybeans is a fair price for 2009
production, and once again we are near being offered these price levels as we
move into the next stage of this market rally. Perhaps it's time to start
becoming a seller of grain again, at least in corn and soybeans, which both have
rallied a little more aggressively than wheat? For wheat, $5.50-$5.70 Chicago
wheat, and $6-$6.50 Mnpls wheat might be some targets to make some additional
sales? Go grains, and let the bulls run wild!

The information contained, while not guaranteed as to accuracy or
completeness, has been obtained from sources we believe to be
reliable. The opinions and recommendations contained are based on
our judgment and do not guarantee that profits will be achieved
or that losses will not be incurred. Recommendations should not
be construed as an offer to buy or sell commodities. There is
substantial risk of loss in trading futures and options on
futures.

If you have questions about this column, call Progressive Ag at 1-800-450-1404,
or email ray at rlg@progressiveag.com.

The market bulls are running in the grains, with new recent highs in corn going back to June 2009, with Dec corn nearing $4. The strength in corn is also being reflected in wheat and soybean markets, as both are running higher as well as the corn. Soybeans are back above $10 and threatening to run to new highs, while wheat is confirming higher highs and higher lows by running to new recent highs today. All of these things are positive technical signs for the market, and is confirming the idea that bottoms have been formed in grains for the 2009 season.

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