Jackson: Well, Mark, the difference between the soy complex this year and down the road is -- or compared to the corn and the wheat -- the corn is going to have stocks this coming year drop a billion bushels. Wheat stocks this year are going to be the lowest, as we said on the show, since 1996. But interestingly if we have a normal crop, if the private estimates we saw this week are accurate we'll still have the possibility of over a 500 million bushel carry out next year on U.S. soybeans. So, inventories are going to stay at near record high levels this coming year. So, the price outlook in the short run of the bean complex may continue to be just remaining in this sideways range literally we've been in for over six months. Longer term, however, we still have this bone jarring, teeth rattling, hard to imagine change in the world supply/demand for vegetable oils that will move us from a three billion bushel, or excuse me, three billion pound inventory of bean oil this coming March to, in our estimates, price rationing and a negative carry out in the '08, '09 balance table. It will just happen that fast as you see the simultaneous ramping up of biodiesel worldwide absorbing bean oil, palm oil, rapeseed and what have you. People recognize that in the next two years you're going to need to take bean prices to a level that will allow expansion in northern Brazil. Right now, of course, with their high cost of transportation, no infrastructure, having to spray for Asian rust several times a year they have lost their economic edge in terms of productivity. You're going to need seven or eight dollar bean futures to get the acreage expansion needed in northern Brazil which we're not seeing right now. Right now acreage is contracting there. The market is torn, then, between this clear idea that we're going to need higher prices to stimulate that acreage long-term, worldwide to produce more oil seeds while at the same time having way too many beans this coming year. So, we actually could work prices lower into harvest this year with near record supplies but then still keep the funds long, long-term betting on that compelling long-term story. Good example, Mark, we will have the largest inventory of bean oil ever in history this coming winter and yet today the funds are long 80,000 contracts of bean oil, the largest long position they've ever had and that underscores the idea that we have big supplies now that even the funds recognize we've got a bullish story right around the corner.
Pearson: Alright, so again, producers take heed not to be in a big hurry to rock up those longer term contracts.
Pearson: Alright, Walt Hackney, we didn't get to it much. We talked a lot about the fed cattle market and obviously some of the changes we're seeing in the cow herd basis because of the drought situation throughout a good portion of the southwest. What is your take right now on this calf market, this feeder calf market would seem to be in relatively good shape?
Hackney: Well, the calf market is in excellent shape, Mark. We had a lull in the movement of contract calves for October/November delivery out of the western areas, maybe six weeks, a month ago because at that time there was a rampant need to buy immediate delivery yearling cattle and the availability kept that market literally sky high. As a result some of those people buying those sky high yearling cattle decided that rate of break even was way above any opportunity to hold their money together at the finish date on the cattle. So, within the last month there has been a movement toward that fall delivery calf, a longer term tenure with the calf in the feedlot. At that time there was plenty of roughage in the Corn Belt to sustain good grow yard and backgrounding yard facility programs to grow that calf. Now, we've got that sustained drought in Nebraska and eastern Wyoming and lower South Dakota where most of the big grow yards have been located over the years. All of a sudden hay, for instance, is worth $110 bucks a ton, some of it $130 bucks a ton delivered. Those growers are not interested in doing that. On the same token, you've got freight, cattle freight here in Iowa and here in the Midwest coming out of, say, Montana. Last year it was five and a half a hundred weight. This year at three and a quarter, three and a half a mile that freight is actually going to run up to seven-fifty a hundred. So, you've got a balancing act going on now about do I buy the yearling at those exorbitant prices or do I buy that calf and pay the big freight. So, there is a real issue being developed right now.
Pearson: Walt Hackney, thank you so much. Doug Jackson, thank you. That's Market Plus for this week. Again, our first foray into podcasting, hope you enjoyed it. For all of us here on Market to Market, I'm Mark Pearson, have a great week.