Golly: I am and looking into 2011 there's some very good prices out there. The June futures are trading at 80 right now. The problem is that the premium is already getting pumped into those futures because we know where the supply situation is. Now, I have a feeling that a lot of producers aren't going to be hedging very much in 2011 because most of them were hedged in 2010 and missed out on a lot of profitable opportunities and I don't think they're going to be hedging very easily in 2011 but the profits are there and urge producers to do so.
Pearson: 80 in 2011 hogs. I haven't even looked at 2011. We seldom talk in livestock those deferred contracts very much and when there's profitability there you need to take advantage of it.
Golly: That's absolutely right and just urge producers to take a look at that in long-term contracts.
Pearson: All right. You're pretty bullish on the outlook for exports and that has certainly been a key driver to hog prices the last couple of years.
Golly: Yeah, I think China is going to step up and be a more aggressive buyer but I think their buying is going to be actually a little bit slower than we would hope. They certainly don't do anything in the fast pace. So, I think the export market is going to do very well going forward, we've got a lot of great products. One thing they did blip up this week is that we didn't, Canada did sign a trade agreement with Columbia that we had hoped to sign and they got in the door first, it's always hard to be second at the door.
Pearson: That was one where we had the deal done and then we didn't pass it and then they came in and they got it done.
Golly: They got it done so all the trade agreements have pretty much been on the back burner for this administration. They have a few other things to be worrying about right now but it's a missed opportunity for the pork producers.
Pearson: Good point. All right, so that's what we have going on in pork. Again, 75 cents for December, maybe looking at that 80 cent contract out in 2011.
Golly: Absolutely. Great profitable opportunities. We need those profits to keep the longevity of the pork producers and keep the pork producers that are in business, keep them in business.
Pearson: All right, rebuild some equity in that business, no question about it. Let's talk with Virgil Robinson. Virgil, you were talking about the corn market and you were also talking about 2011 and 2012 prices and you talked about that the last time you were on the show a month ago and there really hasn't been a lot of movement.
Robinson: Well, movement actually was this past week and, again, I guess my feeling on those distant contracts is simply if you're asking me do I think those contracts have seen their highs this many months in advance of their maturities I would have to answer you I don't think so, I think there's still the possibility of higher prices moving forward. But, again, for those who do go to the exercise or the effort of making a crop budget as best they can and are confident that making sales in those distant contracts or making short hedges that locks in good profitability and meets their financial objectives how can you argue with that? I'm not arguing with that. My only point is if you're asking me those contracts cannot go higher, correct, I'd have to say I'm dubious of that, they sure can.
Pearson: Virgil, how much stock do you put in what we heard from our good friend and climatological expert up at Iowa State that we had joining us earlier, Elwynn Taylor, very well respected comparing this year to 1983?
Robinson: Yeah, to the extent weather is a science I think Elwynn applies his thoughts very well and I've heard his presentation a couple of times this late winter, early spring. It gives you reason to hesitate about finalizing the price of this developing crop and as mentioned crop conditions to this point in time are generally quite good. So, I've used the idea of creating minimum price for months, for years actually and I'm still of the opinion that's a pretty good strategy, a pretty good risk management product at this point in time and if Elwynn happens to be accurate or if his forecast does come to fruition and we have some issues moving forward we're not committed to making delivery and having the anxiety and the fear of not producing that crop.
Pearson: All right, Virgil, good comments, appreciate it. Erin, thank you so much, good to see you. For all of us joining here on Market Plus tell your friends and neighbors to join us here too at our Market to Market Web site. For all of us on Market to Market, I'm Mark Pearson. Have a great weekend.