Martin: Well, I think that we're going to probably to do some work here. Normally cattle futures, especially August cattle and on out, tend to put lows in late June, around the 22nd of June. It's possible that's moving up a little earlier this year, it's possible but with everything that is going on in the stock market and my concern for the stock market down the road here yet as we go through summer I tend to think that we may still have a little more down in the cattle after what we've seen on Friday, the way the market behaved I guess I would have to say there will be a little more liquidation. The open interest in cattle is still quite high. In fact, we set records this year and so I suspect that that's part of our issue.
Martin: It's like the outside markets are overshadowing actually the good fundamentals that this market really does have. If we have a good corn crop this year, of course we're not into it yet, but as we talked on WHO the other day there is a situation and Harry Hillaker was kind enough to share the info with me ...
Pearson: The state climatologist in Iowa.
Martin: Yes, he's a fabulous guy and so is Owen but anyway, basically since 1950 we've had seven years similar to this year where you came in as an El Nino and quickly transited over to a La Nina and out of those seven years six of them in June and August and September tended to be warmer than normal while all seven of them were warmer than normal in July. So that could portend a chance of a little bit less of a crop, a little less vibrant crop. Now, the crop is bred in corn to be able to withstand some drought. I think the thing that is going to be really key is because there's so much of our crop going to pollinate at the same time, let's face it you drive through the countryside and I hear this out of Wisconsin, Minnesota, Nebraska, Illinois, Indiana, doesn't seem to really matter, the corn crop looks good everywhere and you look across those fields and it's all even, every kernel grew and it's lush and green. So, for now that is negative to the market.
Martin: But if we start to get into July and you start getting a fear of a ridge building and some hot temperatures 90% of your yield does come from pollination. So, that's going to be your very critical window. If we make it through that I think then you're going to sell off into August and we very well may have a down and dirty market going into August and even the bean market could take off here, streak up, turn around and fail and come straight back down on the new crop contract and put in an August low and corn could do that too and then you could have that all beside you and then we start looking at next year and what's here to help us out for some demand or whatever. I think the fact that China cancelled up to ten cargos of beans out of Argentina and Brazil, concerns that they may add beans to their list of banning of imports out of Argentina along with the soy oil is a concern. Now, that's not bad for us but in the meantime that means those beans are going to go somewhere and they may compete with another buyer.
Martin: I think another thing we have to keep in mind is that if bean prices get, if they do catch here because there's been quite a few cyclical timing analysts saying there should be a bottom here and maybe instead we did a little bit of a reverse and did a flip here and made a minor high, not what we were hoping for and now the market starts to wear down because should that happen that the markets turn down and say beans are tight supplied like everybody is thinking and the basis would indicate that, well, unless something really severe happens in the Gulf it's not unlikely that they wouldn't ever bring beans up from Brazil into Owensboro, it's happened before and that would be extremely bearish to our market. So, we have to watch, that is an unknown if that will happen but at this time beans do have a strong tendency in the past 40 years that whenever they have had a spike rally market like they had in 2008, similar to that, and then they fail and come out of there they tend before they ever really set up another big bull market, they tend to go back and look at the quarterly moving average and that tends to be down in the $7.40 range on the Julys, I think lead month maybe and I think around $7.11 or something like that on the November beans.
Pearson: Sue, we've got about a minute. You mentioned the funds on the show. I meant to follow up with you but we didn't have time. Funds were told to get out of their positions in corn and beans and wheat and move around some. Certainly we saw a nice rally in cattle, a nice rally in hogs. Could they come back in, in the corn and soybean market if we do have a weather issue?
Martin: Oh yeah, I think they will. In fact, what will happen is if we get a good bona fide weather issue and that's probably what it's going to take for corn and maybe even for soybeans too but if we do get a bona fide weather issue you bet and not only will they be buying but the farmer who has turned bearish and believed the bear story here early this year might then start turning because he's been kind of absent from the market. He may decide now he's going to come back and buy the market and finally feel comfortable about doing so. In the meantime there's an awful lot of corn sitting in the bins that is unsold and the market knows that and so it has no reason yet to go and grab it, it knows it's going to get that corn before fall. And in the meantime on top of all of that, according to Harry Hillaker those seven years, or three years I should say -- let me go back, seven years that we had from El Nino to La Nina, well, what's interesting also about that is there was a tendency for August to also show a little above normal precip. Well, that would be ideal conditions if that happened.
Pearson: Absolutely. Sue Martin, as usual we appreciate your insights, joining us here on Market to Market this week and right here on Market Plus. And for all of us on Market to Market, I'm Mark Pearson. Thanks for joining us and have a great week.