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Market Plus: Feb 12, 2010: Jamey Kohake, market analyst

posted on February 12, 2010


Market Plus: Feb 12, 2010: Jamey Kohake, market analyst Pearson: This is the Friday, February 12, 2010 version of Market Plus here at our Market to Market Web site. Glad you've joined us here. With us this week Jamey Kohake, one of our dynamic new analysts. Jamey, I kind of put you on the spot with your trades for the week on Friday. I thought you had some interesting ideas there. Let's pursue it because here's what I'm hearing out there -- I talked to a group of farmers in Burlington, Iowa, up in Grand Forks, North Dakota, Albany, New York, Spokane, Washington, Omaha, Nebraska and St. Louis and they're all telling me the same thing, wow, we missed that free crop report, how are we going to make any money now. So, what are you telling those people?

Kohake: Right now I don't think there's any large amount of money to be made getting short at $4.00 Dec. corn or $9.13 November beans. I think you have to see a rally to be able to sell into. Longer term there probably is $1.00, $1.50 downside in the bean market based on South America, if we get a half a million more acres or not and see what the summer weather does. But I think you don't get scared and say I guess I could sell the crop off right now. I think you've got time to wait.

Pearson: Now, you did say move some cash, take advantage of the higher basis but then offset that position.

Kohake: Right, you could come and offset it. I wouldn't mind buying some corn to re-own on a break. Beans a little more touchy there just because the volatility is so big. You don't need to tore up for a big loss. But I think a hedger should take advantage of this bean basis. We've seen it firm up, the spreads have narrowed. Old crop beans are rare right now so the basis is helping out. I'd sell a little bit.

Pearson: All right. So, that's kind of your feeling as far as the grain market is concerned because it looks like we are in a confirmed bear market in the grains right now. No matter how you slice it wheat, corn and soybeans there's pressure ahead here. And like you say maybe in the $8.00 range on soybeans. So, it is tempting to move crop here.

Kohake: Exactly.

Pearson: Move beans anyway.

Kohake: Right, if you can do some type of an HTA, if there is an elevator that will let you do that, that's one way to take advantage of it and see what happens later. But, yeah, hopefully between now and March 20th we can see some short covering, relieve these oversold values and be able to get a $9.40 or $9.60 November bean and a $4.20 corn so we can get $9.00 cash, $8.90 if we need to or even $3.90 on the corn basis.

Pearson: Jamey, on the livestock front you talked about some better values for fed cattle and feeder cattle markets just exploded here. You think we're going to see a pullback?

Kohake: Short-term setback. I'm not getting beared up looking for an $8.00 setback and saying it's all over with, just short-term technical correction. I think we will come back up in March and re-test where we were this week. I think the market got too hot too fast and there's no threatening weather in the forecast like the past two weeks around the panhandle of Texas and right now the weather looks a lot better and just looking for profit taking.

Pearson: All right. As usual we appreciate your insights and your ideas for how to make some money in these markets and how it tended to go the other way on us as far as the big numbers in the 2009 crop report. We'll have more, glad Jamey Kohake joined us this week. Join us again this week for more Market Plus here at our Market to Market Web site.


Tags: agriculture commodity prices markets news