Pearson: Welcome to our Market Plus segment here at our Market to Market Web site. Mark Pearson with our senior market analyst John Roach this week. And John, you and I both have been out and about. I was over in northern Illinois and over in northern Indiana last week. You've just been over there in the last couple of days. You said it very well, it's an uneven crop over there. I mean, you do see some places where the corn looks okay and then you'll be going a mile further and you'll find corn that is three feet tall. Soybeans, who knows? You know, it's always a tough one to guess that crop. And soybean prices are what everyone is concerned about because we had this dumping this week, a forty-three cent decline on September beans on the board. What do you tell these producers out there who are holding old crop beans? And you said it, I think there is 300 million bushels that are going to be looking for a home. A lot of them are still on farms.
Roach: Well, the bean market, the bull market in beans was primarily caused by a ten percent drop in the Brazilian crop, or a little better than a ten percent drop in the Brazilian crop. And then it looked like we were going to have another bull market, we did actually because we started to reduce the US crop. However, the US crop already had rust worry which proved to be a bust for the most part and it already had weather worry in it. The first thing that came out was the rust worry. That started coming out in June actually when the hurricane did not bring the spores north that they were thinking. And then when we got those critical rains that we needed to have then the weather started to come out. People are saying in the areas that received rain that maybe those beans will come back, others are saying no they won't. I can tell you from looking at some of the tough areas that there are some very good looking fields and some poor looking fields and nobody really knows what they have out there. We won't know until we get to combining a field.
Pearson: What do these guys with old crop soybeans, are we going to get another shot maybe of this thing coming back? Obviously you've got to come back a long ways from forty-three cents this week.
Roach: Well, we're not going to come back to where we were because we're not going to regain the rust worry, we're not going to regain most of the weather worry. We may regain some. I expect that farmers will be very sluggish to sell soybeans at these price levels and lower. I think the demand will be picking up. We saw on this last week's report the first business of China for the new crop year, 55,000 tons. So, there is some demand out there. In both corn and soybeans we have a very small export book on so either the business is not going to come or it is yet to come. My guess is it is yet to come, that we have demand coming out ahead. So, as I look at the bean, old crop beans anybody who still has old crop beans left is still doing better than had they sold them last year in January so it's not such a bad thing. My guess is nobody has very many of those old crop beans left. I'm more concerned about new crop beans. I'm concerned that producers are going to think there is still a bull market when in reality world stocks are forecast to grow to almost the largest, the second largest ever, almost a tie with what they are this year. So, there is no problem with supply. And there is no problem with supply in this country because prior to getting much more than halfway through our marketing year the Brazilian crop comes on and so whatever problems we have they'll step up and take over. We have to realize that we raise about, or expected to raise about 75 million tons, they are going to, and I say they by Argentina and Brazil, will raise 100 million tons if they get normal yields. So, we have become less important in the big scheme of things as far as soybeans are concerned. There is a little bit of good news and that is that they're not expanding acreage much if any in Brazil. Our sources would indicate just a slight increase in acreage. I know some are saying that they won't plant the beans but the idea that farmers anywhere in the world don't plant productive acreage is just wrong. The new acreage that is being brought into production in Brazil is primarily going to sugarcane stimulated by the energy market because they use alcohol there in lieu of energy and are trying to make end roads in the world energy market with alcohol.
Pearson: Okay, so with that in mind again be on the lookout. Our next opportunity to make it be problems in Brazil to sell soybeans?
Roach: Absolutely, I would not want to carry a lot of soybeans after the first of the year because I'm betting now on a Brazilian weather problem. And if it doesn't happen I'm going to be holding my beans into their harvest and I don't want to do that.
Pearson: John Roach, as usual some great insights. One of our senior market analysts here on Market to Market. That will wrap up this week's edition of Market Plus. Thank you for joining us. For all of us here on Market to Market, have a great week.