Pearson: Welcome to the Market Plus page here at our Market to Market Web site. I'm Mark Pearson thrilled to have with me this week Sue Martin who got in again on Friday night that she's an eight dollar girl on soybeans and she was real close in '05, within 25 cents, almost, 25 cents, getting close to eight dollars on the bean. And, of course, you brought up a lot of interesting things about what could happen in Brazil which could impact this market. There seems to be this confidence that there's a ton of soybeans around. But that isn't what you wanted to talk about. You wanted to talk about livestock and cattle in particular on Market Plus this week and you were very negative on the show, very bearish about what you thought the fed cattle market might do.
Martin: That's true. I think that I've been negative for some time and I've been trying to really talk it on my radio shows and this type of thing because I do a lot of radio throughout the panhandle and I was really hoping to get the cattle producer geared to thinking that he needed to finally start pricing and booking ahead and protecting himself because there is so much meat coming at us. You have stocks, well first off exports for pork were down out of the U.S. for poultry, exports for poultry was down about 25-30% in the month of December alone. We're backing up poultry here, Europe is backing it up and we're going to have a lot of competition and then we've got more numbers of pork coming at us. You know, Canada is importing more cattle into the U.S. You know, cattle prices a week ago was $76.66, we're $89 this week. You know, why wouldn't they ship them south? They're getting more for their cattle and of course the dollar is trying to lift a little bit. So, you know, we've got plentiful supplies of meat, we're going to have more supplies of meat. In the meantime the packer this past week drew his line in the sand and he said, I'm not going to pay up any more for these cattle. I either make them work, I get them bought for what I want or forget it, I'm not going to keep my plants working. And we've seen five plants shut down for a day. Of course, we've also seen Tyson close two plants in Nebraska and there's more talk that Excel will do this if they can not get the cattle bought the way they want, they'll close plants down for, you know, a temporary basis but they'll shut them down for a day or two until they get numbers around them. But they also had formulated cattle to work with and that kind of gave them a bit of a leverage tool. So, as we go into next week I think the packer will come in the next week being a little bit on the short bought side. He'll have cleaned up almost all of his formulated cattle, now he's going to have to bid for cattle out of the feedlots. But the feedlots should not, in my opinion, make the mistake of trying to hold out and be too greedy here. I think that we need to use any lift we get, which I don't think is going to be major and try to take that. Now, in the meantime, the price on the board today April cattle was the weakest one on fats and they got down to about $88.70 or something like that or $87.70 I should say and we penetrated a trend line of support that has held us ever since December of 2003. And that trend line was the low of $68.85 on April futures, year in, year out, April cattle. Taking that trend line from that low off of BSE the first time we had it in the U.S. and across all the lows in through 2005 we took that trend line out for the first time today and we closed under it. So, that is a very bad sign. Now, on an April contract the contract lows for this year's contract is $83.20, last year's contract $83.60. We're not very far away. And I had said the last time I think I was on the show I talked about a 10-12 dollar break in cattle and we're not very far, we've had 7 of that already. I think we're going to get a bounce in this market but I don't think it's going to be major. And then I look for another leg down. I fear that by the time we accumulate all these numbers of cattle -- and part of the problem too has been all this wonderful weather that we've had and the good protein of corn, the cattle have gained well, done very good, yielding very well. So, that is all added to this amount of supply of beef. But my concern is, is that by the time we get into April to May this June contract is going to be on the fire and I'm afraid that it's going to go down to the low 70's, possibly take out 70 cents and we're at $83.05 or $83.20 today.
Pearson: Alright, that's a pretty sharp move lower. That's all the time we have for Market Plus. We thought we'd talk about cattle because we've had a huge bull market in the cattle market, it's run for three and a half years. Sue is right, this cattle cycle -- you talked about fundamental people were now finally starting to see some expansion. So, it's not surprising to see the pressure on it. As usual Sue, great insights. Appreciate you being with us. Sue Martin joining us here on Market Plus this week. For all of us here on Market to Market, I'm Mark Pearson, have a great week.