Martin: We have. This is the harvest break we have had. And seasonably the harvest break will pretty much hit most of the pressure right about this week, this past week, to this coming week. And I think that has helped sponsor some of the bounce we are seeing in the Chicago and K.C. Probably what is helping it more is the dryness throughout South Dakota and up into the Canadian prairie. Along with the fact that today in the U.S. stock and plantings report, the plantings acreages or Durham wheat is the lowest since 1981. You put that along with the weather that is detrimental and there is wheat production going backwards in the spring wheat that is helping Minneapolis wheat futures make new highs, yearly highs here.
Pearson: As we roll the hard red wheat and the harvest moves north and continued dry weather what is a wheat producer to be doing?
Martin: It is hard to sell they are just coming out are harvest and hoping for bounce. I think they will see some, especially as we have rationing taking place this is usually the time of year that demand picks up right after or during and after harvest because supplies are more plentiful. We have to ration the crop. That should happen push the K.C. wheat higher, Chicago is pulled along with it. The Minneapolis is on its own bullish mission as well. I think they don't have to be in any hurry to sell, I think there is something better coming. On the K.C. I think if you can get it up back around the 5.50 I would probably look at selling some. You get up around six and I would really be more aggressive. I think next year's bull story will not be the wheat market, probably the bean market.
Pearson: OK. Let's talk next about the corn market. What you are seeing in corn futures now, we are seeing bases firm back up, it depends on where you are. In Chicago this week we had a bump. The stock report is a factor, acreage is a factor. A nice rally on Friday. What is ahead for the corn market?
Martin: I look at the corn market and feel there is rally towards pollination. The acres did not increase as aggressive as what some were estimating that they would. And I think that that is a friendly surprise. We keyed in in this recent break we went through in the month of June, we were keying in basically two million more acres, at least two, maybe 2.4. Along with cooler weather when it came in in June that set the market back in prices. But, having said that, and knowing now that the final plantings is not as great as what we thought, along with the fear of hot weather moving in, you know, the six to 10-day came ought on Friday afternoon and showed below average temperatures and below average for Illinois, Missouri, Iowa, a lot of places. We will be of great concern. We have to grow corn, a major need for it. Stocks, no big surprise. In line with what they expected. I think the corn market is on a mission for a rebound. We have to be careful here because the producer wants to get bullish easily. And I think we have to be watchful. Corn in Iowa looks stressed. It doesn't take much to stress it the showers we get are spotty. Iowa as a state is getting very dry. It won't take much of the hot weather to turn the crop south in conditions. If the rains are disappointing Saturday and Sunday of this weekend, I suspect Monday we will see a crop deterioration and take the 3 percentage points from last week back off. I caution producers, when you go back over history in the last 40 some years, it is very not normal or very abnormal to see corn rally in the month of July after it put in lower lows in June following some highs in April/may. Taking out the highs of April/may highs, in the month of June, July did not take out the highs of June. You have to be careful, it was abnormal. If you do, the market is on a mission, but I doubt it does. I would say that would happy easier in August than July.
Pearson: Talking about soybeans and then the interest there is there is a lot of soybeans around. This crop is half way accident we are going to have a lot of carryover, aren't we?
Martin: What is interesting when you look at storks on corn, wheat and beans there is less in percentage on farms in the farmer's hands than a year ago at this time. Granted the crop sizes were so big and everything they still have a little more than they would have had in bushel as year ago. But in the beans when we look at the stocks, the stocks came in less. They were under a billion bushels and the trade had them pegged at a billion plus for stocks. And the supply bears say supply, supply. Supply, we have heard that since February, March. We came in a year ago right at 700 million bushels. The key here is, that I think there were a couple of things that showed up. One, that the yields may have been down from what they expected in Illinois, Indiana and Missouri. I think there is something else going on that not many talk about, after the harvest we had and the bean market couldn't break. I think there is more to the story and the market is going higher.
Pearson: The potential bull market in the beans you would not be making sales?
Martin: I would not be making sales if you need cash sales on old crop beans pick July 10 through 13th, 14th, that might be a high.
Pearson: A rally this week on the futures. Into the grilling season in a big way. The cattle market has got some people concerned. Yet the feeder market continues to be strong. What is ahead for feeder cattle?
Martin: The anticipation we were getting tighter on the feeder cattle numbers and the fact that the numbers coming from Canada are slowing down in slaughter and feeder cattle. And I think the combination of that, and cheap corn, we still have cheap corn with the wide basis that is enhancing tomb keep putting in more cattle. At the bottom of the line is, that we have had a huge rally back from a low. All feeders have gotten up around $117.90 or $117.95. There was a gap on the weekly charts at $118.20. We pretty much almost filled that the October feeders filled their gap for that contract. So the market is poised now, I think, to probably, if it comes back up and push as little higher, I that I it's not going to go very far. And I think that you will probably peak the market out in setback.
Pearson: If you haven't placed some hedge, do so.
Martin: Rally and hedge. There is a little attitude first they didn't believe the market could break and then broke hard. Then they were scared and hedged. Now the market move back up and they have an attitude and they have to say this is business, I will stay with it and hedge the cattle as you place them and treat it as a business.
Pearson: Talking about the hog market what is happening as far as the hog prices going. Martin: The hog market has been a wild animal, too. We have seen some demand to Japan slow up. The trade got a little nervous when they heard we may sell beef to Japan, fearing the pork would lose favor and they sold into the market. We are noticing the weights are coming more in line that is a plus. We took the futures on the August hogs to around $74.10, a lot of resistance around $75, and more at $77. The market sold off since that time. It is primarily a hedge or spread situation with cattle, but we are seeing expansion. The pig report showed expansion is underway. I think any rallies I would hedge hogs.
Pearson: Absolutely. Good thoughts from Sue Martin. Great to have you with us. That wraps up this edition of "Market to Market." For more information visit the "Market Plus" page in the "Market to Market" website. Join us again next week and we examine an online trading system for value-added agriculture. Until then, thanks for watching. I'm Mark Pearson. Have a great week.
Captioned by the National Captioning Institute --www.ncicap.org--
"Market to Market" is a production of Iowa public television, solely responsible for its content. Funding for "Market to Market" is provided by Pioneer Hi-Bred, because sound information, plus consistent yields help farmers stay on track. The people who bring you pioneer brand corn hybrids proudly support "Market to Market."