According to the USDA, American farmers are planting 2.4 million more corn acres than in March and 3 million less acres for soybeans. Corn acreage is now pegged to be the largest since 1944 while soybean acreage the smallest since 1995. The futures market took one look at the report and moved violently. At one point, soybean prices were 50 to 66 cents a bushel higher while corn prices fell as much as 16 cents.

Caught in the middle was the wheat market that was resting at its best level in 11 years and was the strong link in the grain complex since April. Wheat prices initially rallied 27 to 30 cents a bushel, following the lead of soybeans. But as corn prices slipped deeper into the red, wheat prices peaked, rolled over and crashed with futures down 27 cents a bushel and a whopping 51 cents off the days best levels.

At settlement, soybean prices were 39 cents a bushel higher for '07 futures and 18 cents higher for '08. Corn prices were 10 lower for '07 futures but 2 3/4 higher for '08 futures. And wheat prices were 12 to 27 cents lower for '07 as well as '08 futures. The soybean market did well, the corn market did poorly and the wheat market carved out what is called a "key reversal the downside" which hints loudly that prices are poised to work much lower in the period ahead.

The corn market was actually lucky because had it not been for the sharp rise seen with soybean prices corn would have done far worse than simply shedding 10 cents a bushel in value. The market was benefited from the obvious; the likelihood of US farmers increasing acreage of corn in '08 is slim. And that of course was the reason '08 corn futures were able to rise 2 3/4 a bushel for the day.

Here are some of my thoughts about the grain complex that may or may not prove accurate. Grain producers and traders should consider the following but understand the key to prices over the next 60 days rests with the weather. In the absence of crop problems here is what should be considered;

SOYBEANS -- ending stocks will drop in '07, the only question is how much and that will take a bit more time to determine.Take advantage of current prices and sell at least 50 percent of expected '07 production. Hold off on further sales. However, my work does suggest that in the absence of crop problems this summer, old crop soybean futures could carve out a low of $7.50 which is a $1 down from here. Is that possible? Time will tell!

CORN -- this will be a year of building stocks and that will cap rallies. The growing season is ahead and despite the current break, the market may yet rally. Unload no more than 40 percent of expected '07 production and wait for a rebound in prices before placing new hedges.

WHEAT � today's crop report was neutral for prices with acres and ending stocks larger than expected. But world fundamentals will lend support to prices into the winter with many touting $7 a bushel as a target. Nonetheless; sell 75 percent of all wheat with prices now at a 10 year high and the market flashing sell signals.

Reflecting back on the March acreage report and thinking about todays report and I am reminded of the old Chinese proverb that goes like this: "fool me once, shame on you. Fool me twice, shame on me!" Farmers need to think about that old saying when the Spring of '08 rolls around. American corn farmers, hoping to market their crop for $5 a bushel because of the ethanol craze are sorely disappointed with what is going on. Based on todays report, they will be lucky to get $4 a bushel and if the upcoming growing season has yields close to normal on planted acreage of 92.9 million, they may be lucky to get $3 a bushel.

Then again, maybe farmers will get lucky. After all, in a few days, the calendar will read 7-7-07 which is as lucky as you can get. For instance, there are seven wonders of the world. The Big Dipper is formed from seven stars. Buddha is said to have walked seven steps upon his birth. There are seven deadly sins, as well as seven virtues in some Christian traditions. Rome was built on seven hills. Gamblers hit the jackpot if a slot machine rings up the combination of 7-7-7. And when trading or investing, it is always better to be lucky than smart.

Call me at 406-682-5010 if I can be of help.