Kub: First of all, I wouldn't say it was flat out ignored. There were obviously people who were willing to follow the USDA in saying that we'll get 155 or 160, I saw someone say 160 today, bushels per acre and part of that is led by this prospect of better genetics and great July weather but all those models and the models that USDA use figure average kernel weights and average starting in the spring. They don't really factor in the spring weather as much as they factor in the July weather. And so that's the error in their model and that's why I think the market and anyone who really has been out in a field or anyone near the Corn Belt this year didn't necessarily ignore that report but they saw that report as an absolute best case scenario for yield and they flat out ignored that acreage number. The acreage number is ludicrous, it's over 90% of what farmers planted and that's what they do in an average year, that's not what they manage in a year that was flooded and poor emergence and just spotty field.
Pearson: Typically we lose 10% in a normal year and it goes into what we call the agricultural black hole. Those acres literally disappear and you can argue that that should happen in a great extent. So, we get back here and we've got -- here's what it looks to me like, it looks to me like okay we're all excited, we've got big corn prices up because now it's going to be short and so we had this blow off top of all the commodities in July which you talked about at the beginning and now they're going, whew, we're going to have enough corn for food and for fuel and for exports and feed. Now, let's relax and get ready for 2009. We're going to start duking it out all over again for acreage.
Kub: I wouldn't even necessarily jump that far because our demand for corn is more than 12.2 billion bushels so let's even assume that we do produce 12.2 billion bushels, that's less than we're demanding in a year. What are we going to do? Import corn? Unlikely. The point is if that August report had come out without anything previous to it, if that had come out after the March report it would have been an extremely bullish report. That's still not an ample supply and demand situation for corn but do we have to wait for the USDA to make these adjustments every month? No, and the market won't either. The market will be out there observing especially if we have weather situations like an early frost. Who knows. If that happens the market will obviously factor that in very quick but it's also likely to factor in any independent crop tours, anything like that that happens later this summer or into the fall when yields are more certain.
Pearson: Absolutely, we'll have those as crop tours are going on. There's a Corn Belt wide crop tour going on through Pro Farmer, there's a bunch of stuff going on out there that's going to create some news and some market volatility, no question about it. Do you sell that? Or do you wait post-harvest? What are you going to do?
Kub: Well, if it's profitable -- here's the other issue, there's obviously people in these markets today on Friday that were willing to believe that the earlier rebound this week was a dead cat bounce and that we're just going to head lower, particularly when you look at the dollar strength. So, there's obviously selling pressure remaining in these markets and if it's profitable and if you're not willing to face that risk then yes, you can sell on an upswing but on the other hand we could have months and months of gradual bullish news feeding into this as we come into harvest.
Pearson: Absolutely, keep an eye on the RFS and if that changes, that was a big one this week we didn't have a chance to talk about. As usual, Elaine, some great insights, we appreciate it. Elaine Kub with us this week on Market Plus. For all of us at Market to Market, have a great week.