Morrow County Grain Growers                             Pendleton Grain Growers

             Duane Disque or John Ripple                                      Jon Sperl

             1-800-452-7396 or 541-989-8221                           1-800-422-7611 or 541-276-7611

              or Dan Steiner 481-6614 (office), 571-3798 (cell)  graingrowers@centurytel.net

                                                            GOOD MORNING!!!

            Below are the best indicated market bids as of:   9:00  on      2/19/08

***NOTE: Corn values vary depending on delivery location PLEASE call for updates.

            Sales numbers will be released tomorrow (cuz of Presidents Day on Monday). Yesterday Goldman Sachs said “wheat will go below $8.50” but also estimated corn could hit $6 saying “the supply shortage was more acute than we expected”. This will be tempered somewhat by recent USDA info. As expected they confirmed the US will export about 23% more wheat than last year, but at its annual AG OUTLOOK forum they are now projecting 90 myn acres of corn. (The report everyone will watch for closely will be out 3/31, but it is nice to see the thought process). What’s that mean? With ‘normal’ abandonment, yield, static demand…US SHOULD produce about 12.5 byn bu which would very closely match demand…meaning we would not need to eat into carryout stocks…a very good thing for end users of corn. The corn number was about 2 myn acres bigger than expected, Beans were as expected at 71 myn acres and wheat as expected at 64 myn acres. Smithfield announced they will cut their hog herd back 4-5% saying feeding losses are just too great, but that also says they don’t expect things to change any time soon. ABA (American Bakers Assoc) are still pushing for the gov’t to curb wheat exports. They said “a year ago we alerted the USDA that there would be a shortage”. My response would be something like: You shoulda did something about it then. Curbing exports has the potential to be a very bad idea on many levels. Early projections (based on crop scores and acres planted) show TX, CO, NE, SD and CA all producing LESS wheat than last year.

            Argie still has their export ban in place till 3/17. Gov’t is estimating that there is 7mmt of wheat sold, which after domestic demand would leave about 3 mmt available. Ave trade guess is that they actually have less than 2 mmt available for export, and will need to spread it out over next 5 months. Japan was in and booked another 4.2 myn bu of reds (50/50) HRW, DNS, and 700m bu of Aussie white. Report out of Japan is that they will raise the floor for locally grown beef/ pork for the first time in 30 years.

            Poet (#1 US ethanol producer) has been working with different technology to ‘free up starches’ and increase efficiency/ conversion ratio. They feel with their new process that they can get 3 gal ethanol/ bu of corn. What it potentially means other than all the existing ethanol benefit models need to be re-calc’d, is this: With new 9 byn ethanol mandate, would require only 3 byn bu of corn vs. 3.33. (saving 333 myn bu) OR would require 2.36 myn FEWER corn acres to produce the same amount of ethnol. FWIW: there are currently 144 plants in operation, and 58 under construction.

***All bids are subject to change, please call for CONFIRMATION of prices. All information in this letter is from sources deemed reliable, and is for informational purposes only**