Kohake: That is right, the carryout is still the problem with the wheat and with demand, the export business. It did get a little bit of support earlier this week but did come back lower by the close of Thursday and Friday's trade off a lower weekly export number. We lost some business to Egypt, that has pressured the market. I think Wednesday's report is pretty much factored in the wheat market, it should not be that much of a move. Everybody is focused on the corn and bean number and wheat is just a follower completely of corn right now.
Pearson: But you'd tell producers not to make wheat sales, get it in the bin, get it somewhere and hold off, you'll get a better opportunity later on?
Kohake: Yes, that's right, hold shorts, I wouldn't do any new hedging in here, I'd just sit back and store the grain.
Pearson: Let's talk about these big numbers you're so excited about, this corn number we've had the private analysts come out, again, big numbers from private analysts, they're seeing this corn crop as being a whopper. Where do you think USDA is going to come at us?
Kohake: 156 to 158, I think that should be factored in by then. This rally we had this week is pretty much a gift for guys that had some cleanup sales to do or didn't want to get hedged early in the year and hopefully they took advantage of it. I think we will test our lows at $3.15 in there, $3.14 sometime in the next two weeks but I think the highs are in on corn unless we have an early frost with the beans and it spills over into the corn.
Pearson: Early frost could be susceptible this year because this is a late crop.
Kohake: That is right, if you look at the silking right now on the weekly Monday report we've about five percent behind last year, about seven to ten days. You go from there to crop maturity about 50 days on average some of this crop out east will not mature until late September and that's right in the bulls eye of some of these early frost dates.
Pearson: You think the acreage number is going to stay the same?
Kohake: No, I don't. I think corn will be down somewhere around half a million beans, up a half a million but I think that's factored about two weeks ago when those numbers first came out.
Pearson: Your soybean number, your estimate of what you think soybeans are going to come in at, where on the USDA report?
Kohake: Two bushels higher than USDA, about 45.5 is where we'd come in plus the extra acres. I think the bean market is all full blown weather right now. If the weather turns good the beans have got a high in right now as well.
Pearson: So, some pressure building, it's not uncommon, we've had these huge demand markets now really since the 15th of September in 2006, we've had demand markets going. It's not unheard of for us to get ahead of that in the production side in agriculture. Is that kind of the cycle we're in right now where we've kind of jumped ahead of where a lot of our demand is?
Kohake: I think you're exactly right and a lot of it has to do with the fund money, speculation money that you see something, go ahead and take advantage of it and who cares if it takes six months to prove it or nine months to get the report out and see if the crop was there or wasn't and you're exactly right, we've seen it in the energy market and part of the grains.
Pearson: You also mentioned that new money, commodity fund money was about a 50 cent move in the soybean market.
Kohake: That is right. The last 50 cents I think was all funds off of weather, the first 50 cents last Sunday night was pretty much guys that were short spec hedgers and they were short and said, I'm willing to fight this while we have 50 cents with a bearish weather forecast coming through this week and the dollar kind of bottoming out and they got scared and said I'm done.
Pearson: Your dollar scenario is fairly flat, you just don't really see much movement in the dollar?
Kohake: I think it's range is 77 to 79 right now and I don't see it doing much at all, 77 is very supportive to everything, 79 is profit taking but I think we're waiting to hear in the third quarter to see if we actually do have a bottoming signal with the broader economy, if the unemployment is still decreasing and we're not just shifting unemployment numbers down from this group is unemployed, now they're off unemployment, just because they're money right now I think that was part of the numbers today, they do look good but it's just people have been on them for so long they don't report them any more.
Pearson: That's true and you also have they may be employed but it may be at a lower wage than where they were before too which becomes another factor and the social economists can all argue about them on their own time. Let's go back to our business which is soybeans and soybean prices. You think we could go back to $3.15 on the board on corn. What is your low on beans?
Kohake: I think beans if the weather pans out this week I think you're still talking somewhere in the $8's, high $8's, low $9's somewhere in there because of these recent lows. The corn number you're looking at we have to break through $3.15 to get to $3, that was roughly the low that we just put in and if that happens Monday or Tuesday I think we head straight to $3.
Pearson: It's going to be interesting, we'll see what happens, the USDA crop report August 12, Jamey Kohake, appreciate you being on the show and being with us on Market Plus. A real quick reminder out there if you're watching us on the Internet that's great but if you'd rather watch the show live on your local public television station now is the time to call your local public television programming director and say we're in agriculture, we're affected by what happens in the agricultural markets, this program is very important to me, would you please air this show. Now is the time to call your local public television program director and say please run Market to Market. So, make that call this week, this is the critical time for those decisions in the public television world and we appreciate your support. I want to say a big thanks to Jamey Kohake, thank you for joining us on our Web site here on Market to Market. For all of us on Market to Market, I'm Mark Pearson, thanks for watching and have a great week.