Pearson: Welcome to the Market Plus page here at our Market to Market Website. I'm Mark Pearson. With us this week one of our senior market analysts, Sue Martin. Sue, great to have you with us. Always good to hear from you. It looks like from the makings of things so far and based on the USDA reports Friday that there are fewer soybean acres than what we had thought there would be initially, down 3% according to the USDA report. They're talking about, you know, record carry out for soybeans. A lot of soybeans in South America. And in the midst of all this you're saying, hey, I think we're poised for a bull market in soybeans. What is your strategy? What are you thinking?
Martin: Well, I really am very friendly. Of course, far be it for me to say I'm not a bull. You know, I've been the $8 girl for a long time. If I ever get my way I'm going to send a case to some of my best friends called the dancing bull of wine. But I guess I would have to say first off, you know, the South American farmer for a long time has been complaining that he just can't make money and he's been dealing with Asian rust, couldn't make his payments, his farm payments, the government had to step up with some financing and this type of thing and that didn't save them all but, you know, they stepped in to help. And what's interesting is through that we have found that the South American farmer is at a minimum 71% sold out on his beans versus 69% of a year ago. So, he was even more aggressive and I think probably what that was is they knew we had these large carry outs in the U.S. and if the weather was good and with the talk of the acres that USDA had talked about in the end of March, 76.8 million acres they were worried that price would go even cheaper. And so when the dollar gave us a correction and a real sell they jumped it up to rise to the occasion and sold beans. So, we're getting them out of our hair. And in the meantime, the U.S. is going to be the origin of favor to sell beans. As we go into next year for biotech Europe is going to be looking at using less rapeseed and palm oil and soy oil are going to be very favorable. And so that's going to help for demand on the soybean as well. In the U.S. biotech is really on the cutting edge of taking off and so I think that's another plus for demand as well. We've been crushing aggressively for the protein and as we've crushed for the protein we're finding that we're having to take more beans out of production, or out of the stocks to get what we need to have our amount of supply for protein that we need. And so we're getting a disappearance that the market has not dealt with yet. And in the meantime out of all of that we're also hearing that the South American farmer is not probably going to plant as many beans this next year, he's real frustrated, we're hearing as high as 10% of the acreage in Brazil will probably not be planted to beans. That is a lot. And then they're already saying because they're trying to keep Asian rust under control they're cutting back on not allowing any irrigation on the beans that follow up after wheat and this type of thing. So, we think that there's some pluses coming and we think that it's on the demand side that we see things better. And we feel that the market has dealt with supply ever since the turn of the year and the market has been unable to break down. The soybean market has been in a sideways range since September. It's been coiling and when you look at a market that goes into a nice rally like it did in 2004 and then turn around and breaks down hard, comes back up like it did in 2005, comes back down and then goes into a rounded bottom effect, so to speak, in the sideways range that it's doing that is very bullish. I've been in this business 34 years and I don't know as if I can recall of a time that we broke the markets down further out of a formation like that on the charts, very bullish. You also have a huge gap on the May beans that goes from $9.61 down to $7.42, huge gap. Well, you know, if you look at the, if you just give a little hint of some bullishness to this bean market it's on a mission, you're going to fill that gap. And I have a feeling this next year we're going to have some really good positives and the Chinese economy is going to stay pretty good I think. We've had some pull back, you know, some tightening around the world to try to, in an effort to slow up inflation but I don't think they can do too much of that or they're going to throw us into a world recession and I don't see that coming. I think China will still be aggressive for another year. Once we get into 2008 past the Olympics I look for things to slow. I think their mission will have been to meet that goal to have better roads, better economy, better housing...
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Pearson: Better food...
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Martin: Yeah, and then we'll start to see them slow up. So, I look for this next year to be very price positive to beans. I see more upside potential than I could ever see on the down side and these bears have not accounted for why this market has not broke down.
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Pearson: We've got about 30 seconds, Sue, you want to talk about hogs. What particularly did you want to say?
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Martin: Well, the hog market I think, you know, we've gotten to this 75 cent area, or close to it and we've had trouble and fell back. I think it's going to take, if we get another little lift here after the fourth of July that could be a secondary rally and then I would suggest you go and you sell hogs. The one concern I've had is there's been an awful lot of disease this year in the feeder pigs, this spring. And that could effect our fall, our fourth quarter. So, I think that if we hedge, you know, just realize that if you start to come back and take these highs out then we have to relook at the market. But I think we've got some highs being put in.
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Pearson: Alright, as usual some great insights. Sue Martin, thank you so much. That's Market Plus for this week. From all of us here at Market to Market, have a great week.