Robinson: Agreed, Mark, and I think the market sensed that today, Friday, May 30th, when through the course of the day it seemed weather forecasts deteriorated continually through the day to the extent that, again, early next week there is a major rain event projected through Nebraska, South Dakota, Iowa and then on north and east. So, should that come to fruition the market will be exceptionally sensitive to that, Mark, and probably build additional premium into the futures market as a result of that. Emergence and planting have lagged, you know, last year's pace and the five year pace and likely to continue to do so at least for the next several days. So, markets are quick to build premium based on those concerns and, again, the recent USDA WASDE report projected the second consecutive year here in the U.S. where ending stocks are likely to be below 200 million and that is concerning as well.
Pearson: So, with all this and with all these things that are happening in this market and with this tremendous demand for vegetable oil and with the slow crops and as you pointed out on the show the real being sky high down in South America should we be pricing soybeans now? You say no.
Robinson: Mark, you know, we've got two different crops here now, an old crop and a new, and the old crop window is closing here rather rapidly. The one thing that I'm real concerned about pertaining to that commodity or that entity is the fact that the big inverses we had just a few short weeks ago, old versus new crop soybeans, have virtually dissipated. Traditionally from the old school of thought when you lose the inverse that we had which was around $1.25 back towards even money it's suggestive of the fact that demand has slowed appreciably. And export sales have in fact slowed, Mark, they haven't collapsed but they have slowed. So, the market I think is sending a signal at least based on that traditional indicator that the pipe is adequately supplied and the demand has diminished significantly for that old crop inventory. I'm a willing seller of that old crop inventory, Mark, but I would replace it, again, with some type of insurance product here and most likely a vertical call spread which can be done for probably 40 to 50 cents should, again, we experience real cropping problems here in the northern hemisphere bean futures and bean prices obviously could go much higher.
Pearson: Okay, so, again, protect yourself on the down side a little bit, leave the up side open to perhaps a weather problems as we are setting ourselves up for additional weather problems with the latest in planting.
Robinson: And this old crop beans, Mark, you've got two things that you need to be concerned -- well several but two that spring to my mind -- one, price and then two, the basis. It's conceivable both could, in fact, decline and depreciate as we head towards the availability of new assuming we get the crop planted and we yield at something near trend.
Pearson: Alright, Mother Nature is still holding all the keys to this thing. We could talk about it all we want but that's still where it's going to come down. Virgil Robinson, as usual some great insights. We appreciate it. That will wrap up Market Plus. From all of us here on Market to Market, I'm Mark Pearson. Have a great week.