Kohake: I do, we've been on an 80 cent rally, short covering rally in the wheat the last week, week and a half and there was really no justification for the majority of the rally besides just fund short covering. There were some area pockets around the world that are having some harvest delays but it's nothing that looks like we're going to be losing a crop anywhere. And so I think you have to take advantage of this. We're at 20 year highs in the carry out and I think right now we're probably 50 to 75 cents over priced. So, I'd look at, as a spec play selling calls but for a producer I would be sure to get a floor underneath this market as soon as possible.
Kohake: Kansas City wheat basis is too wide to sell. We're $1.45 under the board for September delivery all the way out through March. So, selling futures would be the way to go for a hedge and for a spec play selling calls.
Pearson: The wheat market, you mentioned, worldwide there is a glut of wheat still.
Kohake: There is and the one thing that really scares me in here looking at wheat over the last year, year and a half has been this dollar that we talked about a lot on the show. Say for some reason it does go back to 87 or 88 and we're at $6.00 wheat, our exports are going to completely shut down. So, we need to watch these numbers next Thursday when they come out, all the grains, corn, wheat and in beans to see how much business we have lost just because of the short covering rally.
Pearson: Let's talk also about the fed cattle market. You're fairly friendly for the next couple of weeks on fed cattle, you think we might have another $1.00, $1.50?
Kohake: I do, I think you could push August just up around $92. Cash was $91.5, $92 this week. I'm just looking for a little more short covering. Seasonally boxed beef is bearish right now. But the reason I wanted to get short within two weeks, that's when the next cattle on feed report is and I just want to get ahead of that, just nervous about the placement number. And also, too, I don't know how much faith a lot of people want to put in the Dow and the outside markets, demand right now, so I think putting a hedge on $1.00, $1.50 higher is a wise decision.
Pearson: All right, longer term you're not as friendly?
Kohake: I think more range bound. We go back down and re-test the lows from where we were about two weeks ago and we kind of stabilized. I think if we can hold this Dow up around 10,200, 10,500 area the lows in the cattle are probably established right now. But you start breaking 9800 and closing below 10,000 three or four days in a row the meats are going to go with it. Demand is the key to cattle, hogs, everything. We've got to keep these exports up and keep domestic demand up.
Pearson: You feel globally that the economy is recovering?
Kohake: Just real lightly. The bearish news is kind of slowing down every day, I don't think we're back to eight percent growth or GDP anywhere but I think everybody has kind of settled down. There are some banks over in Europe still popping up here and there but I think the big stuff right now is out of the news and just seeing just a little bit of new money in. But I've seen numbers, Mark, there's $3 trillion dollars of cash laying on the sidelines, that's just in the United States and so there is money out there to push this market higher but I think the big question is next year, taxes and demand, where's the economy going to be at.
Pearson: That's right. Some people would rather sit on cash and make one-tenth of a percent as opposed to taking a chance on something. Well, that's usually pre-stages of bull markets so we'll see what happens, Jamey. That's going to wrap up this week's edition of Market Plus. I want to thank Jamey Kohake. But before we go, we want to remind you that if you want to see Market to Market on your local public television station now is the time to pick up the phone and call your local public television programmer and tell them you enjoy Market to Market on the Web and you'd like to see the show live on your local public television station. Give them a call and they'll be happy to put it on I'm sure. Again, for all of us here on Market to Market, I'm Mark Pearson. Thanks for watching. Have a great week.