'I don't want to sell now, but I need money for payments. Do you think I should use the loan?"

That question comes from a farmer in east-central Illinois. Use of the nine-month loan last fall was the highest in the last decade. That's partly because many farmers were disappointed with elevator prices but needed to generate income.

Currently, government loans are for nine months with farmers using grain as collateral. Traders and end users will pay attention to the maturation dates of the corn, soybean and wheat loans because that may be when a lot of grain is forced onto the market.

Farmers have about 110 million bushels of wheat coming out of loan in April and May. That's close to half of the 245 million bushels under loan. A large percentage of it is hard red spring wheat, and the majority is under loan in North and South Dakota.

Watch the market action in the wheat market in April and May as an indication of what may happen in the corn and soybean markets later.

For soybeans, July to August is the key time to watch. Over 160 million bushels of soybean loans will mature in that period, with another 65 million coming due in September. During that three-month period, nearly 75% of the outstanding nine-month soybean loans will expire.

The critical period for corn is August to September, when nearly 800 million bushels of corn loans mature, about 60% of the total amount under loan. Much of it is in Iowa, Minnesota, Nebraska and South Dakota. With this huge amount of corn coming out of loan, both futures and basis levels will be impacted in the western Corn Belt.

The time to buy is when everything is for sale, and the time to sell is when supplies are limited. The difficulty is knowing the difference. Because the trade is aware of when and where large supplies will be forced onto the market, odds are good that futures prices and basis levels will drop during the months when a lot of loans expire.

In addition, watch for aggressive use of the loan deficiency payment program by farmers trying to buy back inventory as low as possible during these key months. Plan ahead. The last two days of each of those months are likely to be the worst times to sell. If you have sold your grain ahead or are in a position to hold inventory into the year 2000, it could be a great time to buy.

The way the Freedom to Farm policy is set up, picking the lows is just as important as finding the highs.