Hjort: Yes, it is. I think one of the reasons that the market hasn't been terribly excited about this, the futures market, this tight wheat supply, number one we had it last year and we ran prices up and then everybody thought they were going to go higher but instead we just started chopping lower and lower, just kept on going for months. This time we're tighter than we were a year ago, the projections are that is. And we've got more weather concerns around the world. Also, you don't have as much other grain to fall back on if you don't have the corn. Rice production down, rice supply-demand balances tighter yet again. So, when you're looking for a food grain you're really going to be struggling to find enough to ration it out and so on. Obviously in the northern hemisphere we're just getting going strong on the harvest and then spring grain production now, planting and so on. But you've got Canada planting less acres this year, you've got this dryness in Eastern Europe, oh, all of Europe was very dry in April. Some of the analytic groups there pulled their production numbers down for the EU by 3 million tons down to about 120 million, 117 I think something like that. And these are still pretty good numbers but they continue to slip and the demand continues to go up for food grains. So, this whole picture has got to come to a head sometime and heaven forbid should we have any serious weather problems anywhere in the country. China, a big wheat producer, and they've had it extremely dry all spring and now in the last week or so they've gotten some rain but it's more or less like an inch or an inch and a half and it's wonderful for the time being but it's still not enough to bring it alive. I would not be surprised by this fall to see wheat prices higher than they were last year. Now, they may not follow the same price pattern, I think if I remember right they put their highs in like at the end of June or into early July last year and I think it will be later than that this year. One other caveat though and that is that all of this wheat and corn, even soybeans, but especially all the grains are all tied together and they're all showing tight supply-demand balances. So, you have slippage in corn yields some place that's going to be bullish for wheat and vice versa. So, it's one of those things to where you've got, you know, all the balls are in the air right now and lots can be happening but to turn to a bearish price outlook for the long-term, sure we'll chop it around, you know, in between and through wheat harvest and so on, but in the long-term to turn it bearish we have to have just perfect weather for the rest of the growing season and then for the growing season in the southern hemisphere as well.
Pearson: And, of course, that is going to be tough to come by worldwide as you pointed out and also I think the Ukraine you mentioned on the show was another dry area, the Eastern European countries have been dry and also, I mean, this year we saw it where wheat was going to be used, wheat's residual value as a feed crop is substantial if, like you say, we have problems with corn.
Hjort: That's right, that's right. So, there gets to be a real tightness there and sorghum acreage, barley acreage and so on, they're not up to where they used to be so there again you don't have that fallback in a regional sense, they're never a national sort of market, but in regional areas.
Pearson: It's like you say, it all adds up. Alright, talk about this then, Doug, we didn't get as much time to talk about livestock as we normally do but I want you to talk about the fact that we've had a break in corn prices since that USDA production number. Should you cover feed needs in here? What should a livestock person be doing to protect themselves? I've talked to so many of them who were unaware last September, and you mentioned it, wheat was the catalyst that caused this whole structure, this whole agricultural futures market to explode last year. Should they be getting feed needs covered now?
Hjort: Soon if not now. For my clients I'm saying keep buying it hand to mouth right now. But you get into a situation to where you can price something on the futures market, for example, but that's not the physical product. And that could be a problem. So, you know, when you're starting to think about over the next year providing your feed needs for the next year make sure that you've got some way that you can assure that you're buying actual corn or whatever you're feeding. I think these prices are going to be chopping around a lot. I don't know that there's going to be much better opportunity to buy corn right now. But the one thing that has happened to corn the basis levels are pretty tight right now so cash prices are relatively strong here compared to other times. So, I wouldn't be in a hurry but keep watching that market and I'd check it every week from here on out. You start seeing that market steadily move higher I would lay in a supply.
Pearson: Alright, Doug Hjort, as usual we appreciate your insight. From all of us here on Market to Market thanks for joining us here on Market Plus. Have a great week. I'm Mark Pearson.