Pearson: Welcome to the Market Plus segment here at our Market to Market Web page, so glad that you've joined us. Be sure to tell your friends, have them join us here too, a bonus from our analyst's commentary on Market to Market. Tonight Virgil Robinson with us. Virgil, I'm not a fear monger but when I see them put 23 degrees at Minnesota on the 20th of August for an overnight low I get a little spooked about the concept of an early frost.
Robinson: Mark, I'm privileged to quite a few weather reports because of the company I work for and I read several of them religiously and there is a consensus beginning to take shape in the mid-later part of September and that is for a period of cold air, unusually cold air stretching over much of the middle part of the country to encompass Minnesota, most of the Dakotas, Iowa, Illinois, Wisconsin, Michigan. You know, so calculations when you start trying to calculate what does that mean given the fact that the corn crop and the soybean crop, for that matter, in that geography is a couple of weeks behind in many instances. There could be as much as a billion bushels of corn at risk to an early frost. And by early frost I mean somewhere around October 1st or sooner. I think the market, you know, will become significantly more sensitive to that, Mark, as we close out the month of August and then begin to push into September. The next two week forecast doesn't appear to be too threatening. But that underlying concern is not likely to disappear, in my opinion, given the fact that these crops are well behind the pace of normal maturity.
Pearson: So, we could be looking at, you know, maybe 10-12% of the corn and soybean crop potentially susceptible here to some kind of problem because it has been cool, it has been a slow to mature crop this week became sensitive to that fact. As you mentioned on the show, Satskatuan and Manitoba both had pretty major frost events at a very unusually early time. So, there is canola at risk up there, there is flax seed at risk, there is sun seed at risk, there is linseed at risk. You know, the concept here, of course, tonight is that over the course of the next several months global soybean and oil seed supplies are going to grow significantly to the extent that come March or April of 2005 with this big assumed crop in the Southern Hemisphere, we have burdensome supplies.
Robinson: Well, a major frost event in the United States, Mark, and/or Canada or both would certainly skew that thinking and change the whole dynamics of the market.
Pearson: Just to follow up on soybeans and you and I were out at an event, a lot of farmers we talked to earlier today the question came up, how would you sell your '05/'06 beans right now if you were to make that decision? Or would you go out on a limb right now?
Robinson: Well, you know, one thing we sometimes neglect to address, Mark, is the idea of revenue, you know, what kind of revenue can be generated if November 2005 soybeans trade to $6.20. Well, depending on geography, perhaps there is some reason driven by revenue and revenue only to begin some type of sales program or at least to try and create some type of minimum price strategy. And I'm kind of in that camp, Mark, and have been the last few years and this past year it served me relatively well, the idea of creating minimum price rather than finalizing price. So, I'm kind of in that same camp as we visit tonight in both 2005 corn and 2005 soybeans. I fully realize there are a lot of things that can take shape or change over the course of the next several months.
Pearson: Some good points, as usual, good to have you with us on Market Plus -- Virgil Robinson. For all of us here on Market to Market, have a great week.