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Market Plus: Nov 26, 2010: Jamey Kohake, market analyst

posted on November 24, 2010


Market Plus: Nov 26, 2010: Jamey Kohake, market analyst Pearson: This is the Friday November 26, 2010 version of Market Plus. now we actually recorded this on Wednesday the 24th because of the holiday. So, it's this holiday abbreviated week for our program. Jamie Kohake is with us on the show and he's with us here on Market Plus.

Pearson: Jamie talk a little bit about the market at you -- as we look at commodities these days, as we look at wheat, corn, and soybeans, and we've had this, you know, spike high rocket, that huge spike we had in the wheat contracts back when the former Soviet Union announced they were ending exports for the time being because the draughts there. And then we had the USDA report we had yet another spike. we have yet to go back really and challenge those spikes that have been coming back here. It looks like a short crop with a long tail, but you don't think that's the case?

Kohake: It could be and what we've seen there in the wheat especially is where the funds were loaded up there big time early spring. They got out and moved money into corn and beans and that pretty much dropped the open interest. And all the news is old news and there wasn't much out there after Russia banned exports through the end of this year. So, the funds made their money, they got out and everybody else was left behind chasing it yet. Right now for Chicago wheat they're back short again 17,000 contracts. Which was kind of a big surprise for as long as they early summer. But here in the year I don't see much of wheat exports stay sluggish. I think once we get the ports cleaned up, they're backed up right now with beans, and I think once the beans get moved over in China the wheat and the corn exports will be moving a lot heavier.

Pearson: Alright the whole situation we have with both the corn, beans, and wheat the fund activity now - they say they're short on wheat are they moving that? Are they long positions now in corn and beans?

Kohake: They have been long corn and in beans. Generally short about 17,000 wheat contracts. That's not much for them at all but they're still long corn and beans. I think they're going to stay long probably, I think, through planting time, keep, you know, the premium belt in there. You look at the balance sheets they're very tight, we're buying acres, need to buy acres for corn if the bio-diesel and ethanol credits stay the same. That's a big key but I think they stay long in corn and beans.

Pearson: Alright. So, for those out there who maybe having done anything yet maybe on main sales? There is this feeling out there that we're going to put this crop away, we're going to lock it up, and the market is going to have to pry it out of our fingers. Could we go to six bucks again for corn for instance?

Kohake: Oh, I think you could very easily. That's pretty much what we're seeing right now. The basis has firmed up here short-term because the bin doors are locked and everybody is sitting back hoping for seven dollar corn and, you know, and fifteen dollar bean which very easily could happen, but if you're sitting there with nothing, you know, forward sold, nothing put toward futures at all, I think you should be putting a floor underneath this for sure. I would go out on, you know, a like a March corn put, buy like a five dollar strike there just to give you some type of floor. If the dollar would somehow strengthen to eighty-three or eighty-five you're going to be below five dollar corn in no time at all. So, something cheap that gets you through the January crop report especially is key.

Pearson: Alright. Jamie, we appreciate your insight. Jamie Kohake our regular Market Analyst here on Market to Market. Thank you for joining us. I hope you all have a great Thanksgiving and for all of us here on Market to Market, I'm Mark Pearson, have a great one!


Tags: agriculture commodity prices markets news