Brugler: I think you've got a good point. With all the computer generated trading, the algorithm trading, any trend at all can accelerate and extend and go too far. Just to change the subject for a minute -- hogs last fall when they got down to $43 it was probably a price that was not justified. But we got an accelerated momentum for three or four weeks and it became a money game and if you were long you couldn't stay in the market, you couldn't afford to stay in the market. So, what am I saying? We're kind of getting that same situation in corn right now. That initial break was so large, a 30 cent move the first day and 20 cents most of the second day. It chased a lot of people out of the market and now they're waiting for better evidence of a bottom before they get back in. There's still some bullish things to consider long-term. For the next two weeks, three weeks, four weeks you probably missed the best selling opportunity you're going to get. But, of course, as we get into March then we're still looking at the planting intentions report, this price drop could change a few minds as to how many acres of corn to plant, the soybean to corn ratio has tipped back to soybeans with this break. Certainly cheaper corn makes for more ethanol use or potentially bruised margins for some of the plants. And, of course, feed use could pick up given what we've just seen with the grain dropping at the same time that cattle and hog prices are going up. So, could you see a friendly type market environment for either March or out into the summertime as some of these trends start to come into play, yes I think so.
Pearson: I want to ask you about one other thing. The USDA releases its report. This has been a trend for I want to say the last year and a half. They released a report, we saw it in 2008 and they immediately announced that they're going to re-audit it, they're going to re-survey it. What is the deal with that? Do we not have as much confidence in that report then?
Brugler: I think it's a function of the kind of weather and market environment we're in right now. In this particular case they knew they had an anomalous situation, they've got 400 or 500 million bushels of corn still standing in the field, they've got three or four states that should have been done with soybean harvest but weren't. The January report supposed to be the final report but once your confidence is final when some of the bushels you're normally counting in the bin are still standing out in the field and falling off the stalk, being eaten by the deer and the pheasants and so forth. So, you've got to -- I think they very realistically said we're going to re-survey the states where we're not sure that the answers we got are the final answer. And I give them credit for that. That's going to happen on March 1, they have said they're going to put it in the March 10 supply and demand reports. They are re-surveying those six states in corn and four states in soybeans to kind of make sure that they got the numbers right.
Pearson: What is your take on the soybean report and on those numbers? Again, big yields which credits the American farmer and certainly the American seed industry and everybody else out there. I mean, a fairly lousy year in terms of a very wet spring and decent summer but cool creating wet corn and a very late harvest to propose these kinds of numbers is really impressive. But soybeans, what is your take there?
Brugler: Well, again we've got 44 bushel yield which is phenomenal. Again, some of it appears to be genetics. You hear these stories about five beans in a pod for certain varieties. We've never had that with any consistency. Of course, the reality is with all the South American production, record crop here followed by a record crop there typically is going to put pressure on prices which should send a signal to the U.S. to not expand quite as aggressively in 2010. We did a little statistic based on the USDA and world numbers that production around the world for 2010 is estimated to be 20% higher than last year. That is a combination of Argentina recovering from the drought and us expanding our acreage here. The problem is crush use, which is where most of those beans go, is only going to be up five or six percent and historically has not gone above nine percent. It just takes more time and money to build crush plants. So, when you've got this huge jump in production and a smaller rise in use you're going to have a build up of stocks and some pressure on price.
Pearson: All right, but again, who knows what could happen by the time we get to planting time. We still have to get that crop in down in Brazil.
Brugler: It's not out of the field yet. They could still have an early frost or a wet fall.
Pearson: We could see the revisions in this report and in that March 10 report too.
Brugler: Good point.
Pearson: Who knows, lots of things working out there. One final thing, calf market. We didn't get to it on the show. This feeder market had a big week on the board this week.
Brugler: Yes, feeders like rising cattle prices, they also like cheap corn, you've got actually potential for another three or four dollars there, probably not right now. We have kind of run pretty hard here. But over time we know that numbers are down and we'll get the USDA cattle inventory report at the end of the month.
Pearson: All right, we'll look forward to that. Alan Brugler, as usual, we appreciate you joining us, appreciate your insights. From all of us here on Market to Market, we want to remind you to come by and see us in Madison, Wisconsin for our special Rural Economic Summit. We look forward to seeing all of you. And for all of us here on Market to Market, I'm Mark Pearson. Have a great week. See you in Madison!