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Market Plus: Mar 11, 2011: Jamey Kohake, Market Analyst

posted on March 11, 2011

Market Plus: Mar 11, 2011: Jamey Kohake, Market Analyst Pearson: Welcome this is the Friday, March 11, 2011 version of Market Plus. Thanks for joining us here at our Market to Market website. With us this week is Jamey Kohake one of our regular market analysts. A lot going on, unrest in the Middle East, Northern Africa continues, abated - sharply on Friday because of the Saudi "Day of Rage" turned into a non-event because the government really cracked down. But then we have an 8.9 richter scale earthquake occurring in Japan. Throws the markets into a tailspin. That's followed, of course, by the debt situation that came to a head in Europe on Thursday. So a lot of strange things are impacting markets to day. A tremendous amount of volatility. Jamey is going to try and make some sense of it.

Pearson: On the show - I want to follow up, I want to talk about metals futures, we ran out of time. What's your take on the gold markets? Silver market has been very strong, are these recovery markets, industrial use markets, or is it still a panic place to go?

Kohake: I still think Mark it's a panic place, inflation play, unrest type play, -- want to park some money at short term. Gold grinds higher. I think the days of 50/60 dollar swings three days in a row are over. The easy money has been made there. Weak dollar obviously supportive. But as you are saying it looks like silver is kind of like the new cotton. Where cotton was straight up for two/three weeks now silver is doing the same thing. I like July silver 32/33 cents that area to buy and I think silver goes north of 40 very easily.

Pearson: You talked about the funds backing out, for instance, the wheat market this week and taking some of the money off the table. Wheat, corn, really the whole ag sector. Is that were they are going? Are they going to silver? Are they going to the metals? Are they going to oil? I want to get in front of where these funds are going.

Kohake: Right. They have been going to metals and in energies, but it's not real heavy. They've - they've been in and out. I think the reports that I have seen a little more aggressively than I have the past few years really has gone in and kept plowing in. There's a risk off type trade they've been doing everything these past two weeks. All this new talk of global economic slow down, the demand slowing down, has scared a lot of money out, but I still think they want to be inflationary markets in the energies and the metals long term.

Pearson: All right. We talked about livestock and the cattle business and for those people in the livestock business trying to make it work with these input costs the last couple of years whoo, you know, halleluiah we've got some decent returns again. You talk about the fact how sustainable is it? How sustainable is this fed cattle market as we go forward?

Kohake: I think a lot depends on fuel prices. You know its 4 dollar the new, you know, 3.50/3 dollar gas or not. But I don't think it stays up in here through fall. I think short term it very easily could. The market isn't showing much weakness on the pricing but I think you've got fall/winter cattle, you've got to get a floor underneath it as uncertain, as shaky as everything is, who knows how the funds are going to interpret another blow-up in Northern Africa or in the Middle East or the currency market, you just never know as volatile this is I think you just buy it, put a floor underneath it, keep buying more, keep scaling in higher cash sales.

Pearson: All right. Well, that's certainly one strategy. Obviously the situation in Japan a short term phenomenon was your analysis on the show. Is there anything long term from this that we need to be aware of?

Kohake: I don't think so. Japan's economy is nothing to brag about, actually in worse shape than ours debt wise. We do a little bit of business with them. The reports I saw mid-Friday this could change obviously. Their infrastructure, grain infrastructure was - isn't badly damaged. They are still reviewing it but it could change. I think it is more of a humanitarian disaster than a market disaster right now.

Pearson: All right. Well, we appreciate it. Jamey Kohake joins us regularly here on Market Plus and of course on Market to Market. And I want to remind you of course this is pledging time for PBS stations across the country. So if you value programs like Market to Market, whether you see us here on the internet or whether you watch us live on your local public television station and of course if we're not on your public television station call your local public television station programmer and say we want to have Market to Market on our show. Then help support it by pledging during hits fund raising time period for public television especially if you find value in what it is we bring to you week in and week out. Jamey thanks so much. From all of us here on Market to Market, I'm Mark Pearson, have a great week!

Tags: agriculture commodity prices markets news