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Market Plus: Mar 13, 2009: Sue Martin

posted on March 13, 2009


Market Plus: Mar 13, 2009: Sue Martin Pearson: Welcome, this is the Friday, March 13th, 2009 version of Market Plus. We're glad you've joined us here on the Internet and hopefully you're telling your friends and neighbors about this service. Of course, if you'd like to see our show and maybe can't see it from your neighborhood call your local public television programmer and say we'd like to watch Market to Market on our public television station. With us this week one of our senior market analysts, Sue Martin. Sue, a wild week in the stock market, interesting week in commodities, interesting week for the corn market. We talked about corn on the show. What is your outlook for this corn market? There's a lot of people wondering just what these acres are going to look like, USDA number calling for more ethanol demand, they have been cutting it back and now they say we're going to use more, feed demand a little softer. Where are we going? What's ahead with corn?

Martin: Well, I think first off when you look at the corn acres at 81.4 million acres on Informa if that was to come to fruition and the bean acres estimated at 81.5 it would be the first time since 1983 that you have had bean acres higher than corn acres in the plantings. And keep in mind it took having a pit program in 1983 to do that. So, this is going to be kind of interesting but we think we're going to grow more corn acres by the time we get there to spring planting and get through the spring planting. We think acres are going to be up on corn. But in the meantime when we look at this corn market we have to realize that we have destroyed in the last eight in a half months we have destroyed demand and now we're destroying production or supply and at some point here when these economies start to percolate all of a sudden we're going to be grabbing for everything and stocks of everything is going to be fairly tight. This next year if we don't garner these acres and you now need 3.7 million acres at least just to go towards ethanol we have to have more acres than 81.4 million acres. I think we'll get it. I think the fact that fertilizer and different inputs have declined in cost farmers are going to be able to take a look at things, they're going to look if the bean market continues to slide that may just help change, we could be in an acreage fight already, I think we are, but it's kind of been going with the beans going down faster than the corn. I think corn is going to hold here. I like corn. I thought that it just woke everybody up on Friday with Informa's numbers and everybody is going to say we don't believe this, we think there's going to be more than this and the market is going to fight to get more. And so I think that we're looking at a corn market that has got some bright spots here and will maybe be stronger this next week, soften right before the report just on fear of what the numbers could say and then after that start a resume to the up side in April. I think that we've got a market here that has the potential to go higher and with demand for ethanol kind of starting to percolate a little bit and getting all the negative news about ethanol plants that's kind of subsided now and I think that's going to be a plus. We've already keyed in the feed side of things and exports this last week 43 million bushels of corn exported. That was a phenomenal number. So, I think that Mexico is going to start to take more corn from the U.S. I think we've got a market that has some limelight here coming.

Pearson: On the show you said you are not a long-term grain and oil seed lover because once we get past the spring you don't think there's going to be a lot to cheer about.

Martin: No, I don't. The farmer is the holder of most of the grain and usually -- we all know, just look at history, when the farmer is hanging onto grain he's usually not the one that wins out. In the meantime because he's holding not only here in the U.S., in Argentina, forward cash sales are behind in Argentina and Brazil and in the U.S. It tells me that farmers are going to have to start to push and, of course, with the corn not being in as good a condition as we'd like it to be when it normally would go into the bins we need to keep track of it and that may force our hands to push it faster anyway but farmers are going to be wanting money come summer. They've been good about hanging on and forcing the market to say, okay, we'll give you a better basis to try to draw it out for this March timeframe but I fear as we get more into summer farmers are going to need money, they're going to sell but we're all selling at the same time and by that time the rest of the world can kind of sit back and be on a hand to mouth basis. In fact, I'm told that a lot of the world, especially in Europe, end users are basically hand to mouth and they don't intend to step up and just book ahead. I think they're going to stay hand to mouth as it is.

Pearson: Alright, Sue Martin, as usual some great insights. Thank you so much, we appreciate it. Sue Martin with us this week on Market to Market and, of course, right here on Market Plus. Again, if you enjoy our program and you've enjoyed this spot on the Internet then make sure you tell your friends and neighbors about it and contact your local public television program director if you're not receiving Market to Market in your community and ask them to run the show. From all of us here on Market to Market, I'm Mark Pearson. Have a great week.


Tags: agriculture commodity prices markets news