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Market Plus: Aug 03, 2007: Doug Hjort, Independent Analyst

posted on August 3, 2007


Market Plus: Aug 03, 2007: Doug Hjort, Independent Analyst Pearson: Welcome to our Friday, August 3rd, 2007 version of

market plus here at our Market to Market Website. Glad

that you've joined us. Mark Pearson, with us this week one

of our long-time analysts, Doug Hjort. And Doug, we

haven't talked much in depth about what's going on in the

hog market but you talked about what a wild week it was,

the cash market didn't do anything, futures were all over

the place. What's going on in this hog market? And should

producers maybe be stepping up their sales?

Hjort: Well, it's really an odd mix here and with the

futures running up the way it has been it really gives an

opportunity to do some hedging and yet if China does come

in and buy some pork from us they might just take this

surplus amount of pork we've got off the market. If they

do I would expect it would be weeks or months before that

deal would go through. Nothing goes fast and especially

with China it most likely won't. But it's an interesting

situation and I suppose maybe doing some hedging here,

taking advantage of this gift if that's what it is in the

futures market doing some hedging might be a good idea.

Usually, you know, market sentiment gets carried away and

runs ahead, way ahead of the fact and then when the fact

does come out it's not quite as bullish as they had hoped

for. Or the other thing would be the delay in trying to

get something done and the futures boys get sick of that

and sell the market back down. More volatility in these

prices because of all this uncertainty but I think it's too

good a deal in the futures boys' mind to give up. We're

going to take these prices, you know, just higher and

higher forever in their mind. But the anchor behind this

whole thing is the cash market and the pork product.

They're not moving higher and as I said it's because of

just too much pork throughout the channel right now. I

think that's probably kind of a temporary situation but it

might be another two to three weeks before we work through

that. So, in that case when you're looking to market hogs

I think a lot of attention needs to be paid to what you're

doing here, take advantage of any even small ups in this

market, make sure you're very current with your sales so

you could go three weeks if needed before you have to make

the next sale. I understand a lot of this contracting

doesn't even make any sense but you've got to market by the

day instead of the time. But try to do that, try to make

the adjustments that you can in there because I think this

hog market could really be in for a wild bust if the China

thing is a no go and the cash market could follow the

futures right back down.

Pearson: Real quick, we've got about a minute, Doug. I

just wanted to follow up with you on your comments on

wheat. We've got tremendously high prices, record high

prices, we have got tight supplies worldwide but we almost

always are growing a wheat crop somewhere. Are we seeing

this thing start to level off? Are we seeing acreage

increase around the world following this move in the wheat

market?

Hjort: We haven't gotten into the planting planning for the

northern hemisphere and that's where most of the wheat is

raised so we don't really know about that yet. But

Australia and Argentina, well Argentina is trying to plant

more wheat but it's dry there and they're having a little

concern about getting it in. Australia has had pretty good

rains here in the last two or three weeks again so their

prospects look good right now, understand it's a dry

climate, though, and that can change in a hurry. Yes, I

think we're going to have acreage increase. As a matter of

fact you look ahead to next year that's going to be a real

interesting mix because we've got to have at least the

acres of corn that we planted this year and still have a

good yield. We'd want more soybean acres next year than we

planted this year and we want more wheat acres than we have

this year. It will be real exciting.

Pearson: Doug Hjort, as usual, some great insights. Thank

you for joining us here at our Website. From all of us

here on Market to Market, I'm Mark Pearson. Have a great

week.


Tags: agriculture commodity prices markets news