Pearson:: Thanks for joining us here at Market Plus at our Market to Market Website. I'm Mark Pearson, glad you've joined us. John Roach, our senior market analyst is with us this week and he's been out touring and visiting with producers all around the Corn Belt. And, John, the crop I think looks pretty good. You'd agree with that, this corn crop.
Roach: I think so. I think that the market rallying this week because of the worry about very hot temperatures, you know, that's normal. But I think that the crop is doing very well out there. In fact, there's some of the areas that really didn't receive some of the rains earlier and didn't receive the rains this week still look pretty good. The areas that, the areas around Des Moines as an example received very good rainfall this week, one of the driest areas in the corn belt. It's now in excellent shape and can go for quite a while I think without any more rain.
Pearson:: Alright, so it looks like a fairly good sized crop coming our way. Big ethanol demand coming down on us this coming year. And frankly, probably decent export demand as well. What do we do with this big crop we're going to pull out? Are we going to see massive harvest lows? Is that what's going to happen?
Roach: Well, I'm not sure about how far, how low the market may go but basis levels are going to be really challenged I think this fall because the Chicago market may hold together but we have to find a place to put the corn. We're going to have over 2 billion bushels in the bin before we start the harvest and when you add that new crop on top and particularly with that new crop coming off earlier than normal to where you maybe even have a little more stocks because you haven't gotten them shipped yet it would seem to me that we're going to have really pressure on the market and I think the most important consideration right now is to get the grains sold that you can't store during these weather worries because the harvest time lows I think are going to be -- the market has to go down far enough to get people to put their crop away in unusual places. And so I think for a producer getting their places lined up, getting their storage lined up will be the most important thing to be doing here these next few weeks. If you can't find the storage you're going to have to go ahead and get the sales made.
Pearson:: I've heard you talk about this, I've heard farmers and I've heard some economists talk about it, the fact that managing basis, managing your crop, physical ownership of your crop is going to become more important to producers as we go forward now with this change in the processing and with the ethanol plants out there.
Roach: Mark, it's been important, it's been very important. People who didn't have their crops sold forward in the last two years and instead took harvest time prices suffered a terrible disadvantage compared to the people who manage their marketing. That is going to continue to be the case. We're going to see people give up on corn at something underneath $2 a bushel and perhaps miss out on something closer to $3 a bushel next summer because they don't have enough storage to handle the crop. I think that is probably the number one consideration for most producers out there of how they can improve their business is figure out how they can better handle that inventory so that they are not having to make any sales during September, October, November.
Pearson:: And they can make those processors bid up that price a little bit.
Roach: Well, I think certainly that is what's going to happen next year. You see, we have 2 billion bushels left in the bin this year, a little more than that. Before we start harvest next year we're likely to have something like 1.5 billion, some people think even smaller than that. So, those bushels will be more sought after by the users this next spring and summer than they were this past year or the year before.
Pearson:: Alright, your advice is get some storage, or at least get your storage lined up.
Roach: Get your storage lined up. This is a great time to look out forward for the next four or five years and I think quite frankly you'll be able to pay for storage the next four or five years. I don't think there is anything else on the farm today that will make you that kind of a return.
Pearson:: John Roach, our senior market analyst joining us this week on Market Plus. Thank you for joining us. Be sure to tell your friends and neighbors. From all of us here at Market to Market, I'm Mark Pearson, have a great week.