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Market Plus: Jun 09, 2006

posted on June 9, 2006


Market Plus: Jun 09, 2006

Pearson: Welcome to the Market Plus page here at our Market to Market Website. I'm Mark Pearson. With us this week we have Darin Newsom and Erin Golly and boy I'll tell you what, talk about different opinions on these markets, you're getting them here today. Let's talk first about livestock. And Erin, on the show, you were emphatic about getting fall hogs hedged now.

Golly: Yes, very important. I think that producers have just gotten an opportunity that they wouldn't usually see during this time of year and all the figures that we're seeing from people talking about we're going to have really good numbers this fall, you know, and we're going to have plenty of slaughter space for it but it's important that, you know, we get some futures locked up in here and create some hedging opportunities for people.

Pearson: Okay, you mentioned on the show several months ago that you said we're going to have a problem here with pork productivity, we're going to see sow problems, we've seen that. We've had a hole here and it's been filled by higher prices. What is your take now? Have we gotten a handle on these -- you've been out at the World Pork Expo, what are you hearing from people? Are we getting a handle on these issues?

Golly: No, I think we're not hearing as much on the circle virus because people are just tired of talking about it. It's still prevalent out there, we're still seeing problems from it and that is why we're going to -- and actually right now on the slaughter side of it packers are pulling hogs ahead right now so we're seeing lighter weight hogs, hogs are about a pound under last year's levels. So, you know, we're keeping hogs right up to currency and it's going to continue to do that I think for a while where we're going to be killing lighter weight hogs.

Pearson: So, with that in mind despite the bigger numbers this fall you'd still make some sales right now to lock in some profit?

Golly: Yes, I would. I would definitely agree on doing that, it's very important.

Pearson: Alright, Darin, wheat harvest, it's rolling along and I'm not hearing any good reports to be honest with you.

Newsom: No, it's really, I guess you could say disappointing is probably the best word. They knew it was going to be bad. We haven't had any moisture in much of the southern plains, going back to who knows how long. So, they knew the harvest was going to be bad, it's living up to those expectations and in a lot of cases it's actually worse. Yields in some of the better areas of the state now are running somewhere between ten and twenty bushels to the acre. I think when it's all said and done, I know USDA had a report out this last week, but when it's all said and done I think they're still going to be overstating the hard red winter crop. I think it's actually going to come in lower and that is going to continue to provide support to this Kansas City wheat market.

Pearson: Okay, well it's been a wild deal so far and it's affected all the other wheat markets as well.

Newsom: It certainly has. We've also seen the situation where the strength in the Kansas City with the non-commercial buying interest in the commodities is whole, we've seen markets like the soft red winter which have just exploded higher without the benefit of having a supply/demand situation to support it. And so now if those traders begin to lose interest, say in the Chicago wheat market we could see that class of wheat really drop quickly. We've seen the July Kansas City move over a dollar premium to the Chicago July. So, that market could be having some problems as those folks get ready for their harvest and move into their harvest over in the soft red winter wheat area.

Pearson: Alright, Darin Newsom, Erin Golly, thank you so much. That concludes this portion of the Market Plus page here at our Market to Market Website. I want to thank you for joining us. We'll have more, of course, next week. From all of us here at Market to Market, I'm Mark Pearson, have a great week.

 


Tags: agriculture commodity prices markets news