Pearson: Welcome to the Market Plus page here at our Market to Market Web site. Boy am I glad you've joined us. What a week it's been. We touched on this in the show, we had a record, Sue Martin, I want to say a record hog kill over the last five days. I'm pretty sure I've got that right. Don't check Ripley's on me but I'm pretty sure we had a record five-day hog kill in the U.S. and decent dollars. I mean, we didn't get clobbered on price this time. We had fewer hogs being killed back in '98 and we had single digit hog prices and here we're at fairly attractive prices and bigger numbers. What is driving all that?
Martin: Well, it's first off the exports is a big item. And in the consumer demand is very avid after pork. And, of course, they've done a good job advertising pork, you know, as the other white meat and with all these protein diets pork has done real well this year. But in the meantime beef has gotten quite high and so pork has been competitive. I think that the market can still push higher but I think if we see $67.50 come out on October futures that is a very good sign. The one thing we have going in the hog market that we have to keep in mind is that it is bull spread. Each month is higher than the next one behind it.
Pearson: Right, we need to take advantage of that don't we?
Martin: I think so. I think that the market is still going to try to push higher. We need to watch it because it is also seasonal to rally in September and then start to break down towards the end of the month. So, we need to watch this $67.50 area. If we start to have problems there that is a sign to maybe get some sold. But I think this market is going to be good.
Pearson: Okay, on that positive note let's switch over to soybeans. You surprised me in the show. You were very friendly to soybeans. Now, we're talking May. I want everybody to listen to this, you're talking the May contract.
Martin: That's right.
Pearson: You think eight dollars?
Martin: That's right. Now, do I think it happens in the month of May? No, I do not. I think it comes earlier than that. I think it comes in January/February, maybe it's over with in February, could get into early March but I think it might be over with by the end of March. In fact, I don't even really expect it to get into March. So, I think you sell you beans at that time. If we have a weather issue, again, remember South America has dealt with Asian rust pretty avidly. There is more talk of El Nino and if that is the case that could enhance Asian rust spread again in South America. Do they get the 66 million metric ton crop that the USDA has been talking about for three months? I don't think they do. But you're dealing with the USDA, they've always been higher, they were the highest one last year to start with and that is what the funds look at when they do their stats, you know, and try to decide fundamentally what direction the market is going to go. So, I think there are a lot of issues that South America is going to deal with to get that acreage and I don't think we're going to end up seeing the high acreage, not even the Brazilian government thinks that they're going to have that much. They are considerably less. So, I think that when we look at the bean market out of Brazil we're going to have to be very watchful how the weather goes, any issues that they deal with and if things don't go real swift that is going to add vibrancy to our market. In the meantime, where does everybody go to get beans, it's the U.S. And the other thing is, is that our crusher here is avid trying to get beans to crush and the basis levels right into the end of the month should be pretty good. I think this next week we'll see beans come back up and test the $5.83, $5.90 area.
Pearson: Alright, so there you go. Again, if you need to make short-term sales that is probably going to be your last opportunity here for a while.
Martin: I think so. The basis is good but probably once you get past the end of September that basis will be gone. So, if you've got beans you've got to sell take advantage of that basis and try to get them moved. And then use the pull backs here and lock yourself back up with the May bean contract.
Pearson: Excellent points as usual. Sue Martin joining us here on our Market Plus page. For all of us here on Market to Market, I want to thank Sue and thank you for joining us here at our Market Plus page. For all of us at Market to Market, have a great week.