Kub: Well, I'm going to step back a little farther and even compare to 1988 because it's been pointed out that this was when the top came in for the 1988 corn crop because it had bullish weather but it was bullish dry weather and then rain can come in and help that. But that's not the case where you're like '93 or this year because you have wet weather and there's no clue about how it's going to dry out in the future, what can help it or how these genetics, how these seed technologies are going to respond to being wet in the spring. The other thing that's similar about '93 and now, not only the uncertainty of how seeds respond, but also that it was cold. We don't only just have the wet to deal with but there's this late emergence and late progression. And so, yeah, in '93 we saw -- in '92 national yield was 133, in '93 it was 100 and then in '94 it was 130 something else. So, it was about 30 bushels per acre down from what it should be. And if you take even a 15% projection off of what it was expected to be this year that leaves you at about 130 bushels per acre meaning that there's no way we're going to get even 10 billion bushels of corn this year if you believe that it's going to be that dire and I think it very well might be because we don't know what the seed is going to do and you've got weed problems and nitrogen problems and just everything.
Pearson: We also have, you mentioned, agronomic issues. A buddy of mine called me this morning and he said, hey, he said, I've got John Deere corn. And I go, what's that? He said, it's green and yellow at the same time. And so with that and nitrogen issues you mentioned how much of that nitrogen is gone from the soil. So, crop prospects are gloomy right now at best. At a 10 billion bushel corn crop what does that translate to for price?
Kub: Oh gosh, I have no idea. But the thing is it's going to take forever to really figure that out. It's going to be a slow churn higher because a lot of these traders in the market, they're not out here, they don't see the corn and so what they have to rely on is what USDA puts out and USDA doesn't want to say that the crop is poor or very poor, it wants to be very conservative about how it does it because it doesn't want to freak anybody out, it doesn't want to upset the livestock producers and all the people who have to buy this corn. So, they're going to be very slow in doing that but it's not a cosmetic measurement, it's about whether or not yields are challenged and they are. The fact of the matter is that this is a lot more bullish than the numbers themselves communicate.
Pearson: Do you buy into the 3 million acres of corn? Do you think that's about right for what's lost in 2008?
Kub: Well, lost acreage wise maybe, yeah, because we're going to see some drying out, probably five to ten million got wet but maybe not long-term. But just because the acres still have some corn that will be harvested effectively we lost five to ten million acres.
Pearson: Big numbers obviously and big problems going forward. On the show we talked about some of the policy things and who knows what's going to happen on that front that could be impacting us but your feeling is that this is going to be a slow grind higher?
Kub: Yeah, throughout the summer and even into the harvest because if we get this situation where all of the government numbers and the markets are second guessing and being conservative and waiting to see demand destruction, if we get people really resisting this higher churn and then we get to the harvest and realize that it was a lot more bullish than anybody realized throughout the summer, you know, actually it will be in the summer when you can make some yield estimates that I think they're really going to get the last bullish kicker if we don't get significantly better weather really soon.
Pearson: We'll see this rationing start to occur, it's occurring now.
Pearson: Elaine, as usual from a strategy standpoint then on the show you said you're not in a hurry to sell corn or beans?
Pearson: You are in a hurry to sell wheat.
Kub: Yeah, if you look at the price in Europe or the price anywhere else it's so much cheaper than it is here, even considering the cheap dollar so why would anybody -- the export demand will simply go away for wheat this year which is kind of bad news for U.S. wheat farmers because they grew a lot of it and where is it all going to go. Some of it will go to feed, there will probably be some substituting of wheat for corn.
Pearson: Alright, as usual really appreciate it, Elaine, your participation, your expertise on tonight's show. And, by the way, following our show here in Iowa we're going to be having a flood special, hope you can join us for that. You can use this Web site to e-mail us questions. We'd love to hear from you. And, again, that will be on Friday evening following the airing in Iowa at 8:00, at 8:30 we'll start our special flood disaster and recovery show here on Market to Market. Again, of course, also you'll see that on our Web site as well. So, be sure to stick close, check our Web site frequently, lots of things will be happening right here. And, again, thanks to Elaine Kub. For all of us on Market to Market, I'm Mark Pearson. Have a great week.