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Corn: The crop has been whittled down by high temps and dry weather during pollination. However, it is still likely to be more than 10 billion bushels, and the market will have to focus on where to store it and who will own it at harvest. Expect storage premiums to go to full carry, or even a little more. Home bins should pay big dividends in basis improvement.

Strategy: Finish up old crop sales. Basis will get worse, with 2 billion bushels of unused old crop to come to market. We’re forward selling 10 percent of expected new crop every dime higher. You should be about 50 percent priced, assuming you have crop insurance. With the lousy basis, hedgers may still be better off buying at-the-money put options, which leave the upside open.

Soybeans: Soy oil stocks are record large, but could go away quickly via biodiesel use if crude oil supplies from the Mideast are choked off. Soybean meal continues to be cheap, because of all the DDGs coming out of the ethanol business. Soybean prices have held up well because of the soy oil story, and a likely reduction in Brazilian plantings. However, any weather story in beans will be played out in another two weeks and we’ll be faced with close to three billion bushels to store at harvest.

Strategy: Forward contracts should be in place for up to half of expected new crop production, with November 620 puts or bear put spreads purchased to protect the downside of the rest of the crop. Minimum price agreements or HTA’s are appropriate in some situations.

Wheat: Heat and drought in the Plains have boosted hard wheat prices, and helped boost SRW values higher than inventories say should be possible. Recent export data shows that high prices have slowed U.S. wheat exports more than necessary to meet U.S. Department of Agriculture projections.

Strategy: There is a seasonal tendency for post-harvest basis improvement into early September and again into December. Selling wheat when the elevator wants to have bin space for corn doesn’t work well. Reward the current rally with cash sales, and hedge the rest until Thanksgiving or later.

Livestock: Cash hogs appear to have posted a normal seasonal top and are headed into the fall lows. Cattle prices are under some pressure from the cheaper pork, and also from large 3^rd quarter marketings. Re-opening export trade with South Korea, Japan and/or China would help compensate for 6.5 percent larger U.S. beef production thus far in 2006 when compared to 2005.

Strategy: Heavily hedged in hogs through December via short futures, short calls and long puts. Looking to lock in feeder prices on any late July to early August swoon. Look to take profits on short cattle futures and long puts over the next couple weeks in anticipation of a seasonal rally into September or October.