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Cruise 2009 Presentation

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  • 1. © Roach Ag Marketing, Ltd. Grain Price Outlook and Market Strategies Cruise The Crop Markets by John Roach January 18 - 24, 2009 Day 1
  • 2. © Roach Ag Marketing, Ltd. Why were grain prices so high?
  • 3. © Roach Ag Marketing, Ltd. Population Growth Rates Source: USDA Agricultural Projections to 2017.
  • 4. © Roach Ag Marketing, Ltd. Global Meat beef + pork + chickens & turkeys Production, per capita consumption, and population Source: USDA Agricultural Projections to 2017.
  • 5.
    • Dollar Index
    © Roach Ag Marketing, Ltd. Dollar Value Down 40% Since 2002 Peak
  • 6.
    • DJ / AIG Commodity Index
    © Roach Ag Marketing, Ltd. Index Up 180% Since 2002 Low
  • 7.
    • DJ / AIG Commodity Index
    © Roach Ag Marketing, Ltd. Index Up 180% Since 2002 Low
  • 8.
    • DJ / AIG Commodity Index Composition
    © Roach Ag Marketing, Ltd.
    • Energy: 37.6%
    • Livestock: 6.97%
    • Grains: 16.57%
    • Base Metals: 19.54%
    • Precious Metals: 8.99%
    • Softs: 7.59%
    • Soybean Oil: 2.74%
  • 9. © Roach Ag Marketing, Ltd. What happened to cause prices to drop?
  • 10. © Roach Ag Marketing, Ltd. USDA 2008 World Corn Yields 6/10/08 149.0 Bu/Acre U.S. 87.6 Bu/Acre Chinese 78.1 Bu/Acre World 60.1 Bu/Acre Non – U.S.
  • 11. © Roach Ag Marketing, Ltd.
  • 12. © Roach Ag Marketing, Ltd.
  • 13. © Roach Ag Marketing, Ltd.
  • 14. © Roach Ag Marketing, Ltd. There will not be enough money to raise crops this big next year
  • 15. © Roach Ag Marketing, Ltd.
  • 16. © Roach Ag Marketing, Ltd.
  • 17. © Roach Ag Marketing, Ltd.
  • 18. © Roach Ag Marketing, Ltd.
  • 19. © Roach Ag Marketing, Ltd.
  • 20. © Roach Ag Marketing, Ltd.
  • 21. © Roach Ag Marketing, Ltd.
  • 22. © Roach Ag Marketing, Ltd.
  • 23. © Roach Ag Marketing, Ltd.
  • 24. © Roach Ag Marketing, Ltd.
  • 25. © Roach Ag Marketing, Ltd.
  • 26. © Roach Ag Marketing, Ltd. There will not be enough money to raise crops this big next year
  • 27. © Roach Ag Marketing, Ltd.
  • 28. © Roach Ag Marketing, Ltd.
  • 29. © Roach Ag Marketing, Ltd.
  • 30. © Roach Ag Marketing, Ltd.
  • 31. © Roach Ag Marketing, Ltd.
    • World coarse grain ending stocks tight
    • U.S. ending stocks are tight
    • Exports off to slow start
    • Ethanol demand slowing
    • We still need a big corn crop every year
    • Price peak due in Mar – June in 2009
    Corn Situation and Price Outlook
  • 32. © Roach Ag Marketing, Ltd.
  • 33. © Roach Ag Marketing, Ltd.
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  • 48. © Roach Ag Marketing, Ltd.
  • 49. © Roach Ag Marketing, Ltd.
  • 50. © Roach Ag Marketing, Ltd.
    • World soybean ending stocks not as tight as corn or wheat, but demand is solid.
    • US stocks very tight
    • Look for shrinking 2009 crop in S. America
    • Prices currently tied to China demand and S. American weather
    Bean Situation and Price Outlook
  • 51. © Roach Ag Marketing, Ltd.
  • 52. © Roach Ag Marketing, Ltd.
  • 53. © Roach Ag Marketing, Ltd.
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  • 58. © Roach Ag Marketing, Ltd.
  • 59. © Roach Ag Marketing, Ltd.
    • World wheat ending stocks burdensome in 2009
    • US stocks adequate
    • Look for shrinking 2009 world crop
    • Prices currently and likely to be dominated by former Soviet Union production
    Wheat Situation and Price Outlook
  • 60. © Roach Ag Marketing, Ltd. How Should I Market My Crops?
  • 61. © Roach Ag Marketing, Ltd.
  • 62. © Roach Ag Marketing, Ltd.
  • 63. © Roach Ag Marketing, Ltd.
  • 64. © Roach Ag Marketing, Ltd.
  • 65. © Roach Ag Marketing, Ltd.
  • 66. © Roach Ag Marketing, Ltd.
  • 67. © Roach Ag Marketing, Ltd.
  • 68. © Roach Ag Marketing, Ltd. Roach Ag Sales Plan
    • Make as many of your sales as possible during the months of March, April, May and June. Avoid October and November
    • Sell in increments to take advantage of several market peaks using Roach Ag Sell Signals
    • Buy puts on unsold new crop production with either profit goal or insurance goal
  • 69. © 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
  • 70.
    • December 2007 Corn
    © Roach Ag Marketing, Ltd. Both Lines Over 75 = Roach Ag Sell Signal
  • 71. © Roach Ag Marketing, Ltd. Roach Ag Sell & Buy Signals Your Digital Thermometer For Prices
  • 72. © Roach Ag Marketing, Ltd. Roach Ag Sell Signals When Both Lines Are Above 75 = Sell Signal
  • 73. © Roach Ag Marketing, Ltd. Roach Ag 2007 Corn Sell Signals 56 Days of Sell Signals ($3.91) and 272 Days Without ($3.71)
  • 74. © Roach Ag Marketing, Ltd.
    • Sell only when markets are giving us a Roach Ag Sell Signal
    Rule # 2
  • 75. © 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
  • 76. © 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
  • 77. © 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
  • 78. © 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
  • 79. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 80. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 81. © Roach Ag Marketing, Ltd.
  • 82. © Roach Ag Marketing, Ltd.
  • 83. © Roach Ag Marketing, Ltd.
  • 84. © Roach Ag Marketing, Ltd.
  • 85. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 86. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 87. © Roach Ag Marketing, Ltd.
  • 88. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 89. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 90. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 91. © Roach Ag Marketing, Ltd. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract
  • 92. © Roach Ag Marketing, Ltd.
  • 93. © Roach Ag Marketing, Ltd.
  • 94. © Roach Ag Marketing, Ltd.
  • 95. © Roach Ag Marketing, Ltd.
  • 96. © Roach Ag Marketing, Ltd.
  • 97. © Roach Ag Marketing, Ltd. Roach Ag Marketing Plan Worksheet
  • 98. © 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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