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By Alan Brugler
Ag Market Professional

Corn: If ear weights end up light (as we expect), it will be tough to have a crop much over 10 billion bushels. USDA won’t release those ear weight numbers until the October crop report. For now, the problem is lost shipping capacity in the New Orleans area (Mobile has now re-opened) and finding a home for what will likely still be the 2 ^nd or 3 ^rd largest U.S. corn crop ever. The market will worry about any 2006 acreage cuts due to energy costs after it finds a home for the entire 2005 crop.

Strategy: Shipping problems at the port of New Orleans are magnifying harvest basis weakness. If you can avoid selling more cash corn until December, the market will likely pay you for storage and interest. Continue to hold long December puts purchased last summer as a price floor but look to take hedge profits on evidence of a seasonal bottom in flat price and/or basis.

Soybeans: There is a market axiom that "rain makes grain". Clearly, traders believe that is the case for soybeans. They topped out back in June when it became evident that the hurricanes were bringing moisture into the eastern Corn Belt. There is a short term problem with product demand, shown by large July Census stocks. That problem should be cleared up soon, due to extensive crush plant downtime in August.

Strategy: Last month we said "Don’t get wrapped up in the bull talk. Get some sales on the books at better-than-harvest basis." You should begin delivering those sales in a couple of weeks as the combine rolls. If you have long puts from July as well, consider rolling them down to at-the-money prices to protect profits as we go into a potential seasonal low.

Wheat: Soft red wheat demand is still poor internationally, due to cheap competition from the Ukraine and others. We’re fast approaching a harvest period where elevators don’t like to handle wheat and will bid accordingly. Basis and flat price usually recover by early December.

Strategy: Avoid selling cash wheat between Labor Day and Thanksgiving, due to basis considerations. We have recommended storage hedges in December or March futures (at higher prices) to protect unsold cash wheat in the bin.

Livestock: School food service demand pushed up wholesale meat prices in typical seasonal fashion. The market worry is a loss of consumer demand due to high gasoline prices and a tendency to substitute cheaper cuts and more chicken. Beef carcass weights are still running eight pounds above year ago, adding to the tonnage available. There was some loss of broiler production in Mississippi from Hurricane Katrina but a quick recovery is expected.

Strategy: Last spring’s cattle crush spreads have worked extremely well for fall placements. Cash feeders are expensive, so don’t fool around. Put a price floor under the finished cattle by buying at-the-money live cattle puts or spreads. Synthetic puts (short futures and long calls) are also an option. Ditto for hogs.

Disclaimer: There is a substantial risk of loss in futures and options trading, and losses may exceed the initial investment. Not all risk management tools are appropriate for all producers. This article should not be seen as a solicitation to trade futures or options. Past results are not necessarily indicative of future results. Opinions expressed are those of Brugler Marketing & Management LLC, which is solely responsible for the content.

Brugler Marketing & Management LLC is a registered Commodity Trading Advisor and member of the National Futures Association. Brugler Marketing offers sophisticated analysis and daily risk management advice to Ohio producers through its Ag Market Professional and Special Research Reports publications. For additional information, call 402-697-3623, or visit the Web site at www.bruglermktg.com.