Pearson:Welcome to the Market Plus page here at our Market to Market Web site, I'm Mark Pearson. This week one of our long time analysts, Doug Hjort joining us and Doug, no matter where you go, I don't care who you're talking to, soybean prices are coming up. I mean, we're hearing people everywhere talking about it. I got my car lube, oiled and filtered the other day, the guy started talking to me about beans. It's a little scary.
Hjort: Well, it is. You know, a month ago Wall Street Journal ran a story on it and the old saying is that whenever the Wall Street Journal gets a hold of something agriculture it's all over with. Well, it was for a while, two or three weeks, we got a big correction down and now we're coming back. What's happened in that whole thing is that futures are coming back now and they haven't reached contract highs. But the basis has improved so dramatically in a lot of places that you do have cash prices right back at the best we've seen of the year. On the show I eluded to new crop and how we could possibly be getting ourselves into as bullish a situation for next year as we have this year. There's a lot of ifs in that, of course. But in 1995 there were a lot of ifs in the corn market too that had to fall in place and they certainly did. The difference in the soybean market and corn too as far as that goes now versus what it was in '95/'96 is called demand. Demand is so strong for protein that we're at a point now to where worldwide we can not raise enough grain and we have to rely on very high yields of soybeans every year just to maintain that demand that is out there. Now, China is going to try to slow down their economy, they say, but so what. They slow it down from eight percent growth to six percent growth, you know, it's still going to grow, it's still going to be a very strong demand market. China can't raise enough grain or oil seed for their own use. They're going to be in the market. They will be importing corn sooner or later. Some people say they might import some corn this year. But demand for beans is still there, it's going to be bigger next year in the world than it was this past year. So, if we don't raise a record large crop this year we will see new crop prices having to keep coming up, keep rising throughout the spring and summer and fall until we get to that point to where the new crop and old crop become one price. The old crop prices aren't going to go down much. Now, the caveat to all that is that if we do have these record high yields or very high yields anyway, 40, 41 bushel yield, something like that with a million or two million acres more planted then we'll be able to hold our own with the supply and demand balances. But this could be the next big move as we're looking -- everybody is waiting for the new crop corn prices to take off because that demand is so strong for grains. Well, the soybean thing is just kind of a sleeper in my opinion and we could see that really start to bubble. In that regard, I think people have to be very careful on pricing new crop beans. Last year there were an awful lot of beans that were priced at six dollars, six and a half, seven dollars and so on. A lot of people that I've talked with were all sold out before they got to eight dollars. Those are good prices, don't get me wrong, you're making money but in agriculture there aren't very many times you get an opportunity to sell at those price levels or higher. So, I'd be a little cautious, especially at this date on the calendar before I started pricing any new crop beans.
Pearson: Doug, you follow wheat very closely and the grain markets, we've only got about a minute or so and I know people ask us all the time. And I also know they'll sit there and watch the news and they'll go to the weather guy and he'll predict rain for the weekend and it's bright and sunny and hot and he'll predict wet and cold. So, they're not too good at 72 hours, how can they be good at three to six months? But I have been told and you've seen it in the West where we have this creeping drought effect, we're dry again in those regions again this year. There is talk that that is spreading into the Western regions of the Corn Belt. Do you put any stock in that?
Hjort: I put a lot of stock into how weather patterns play out. I'm no good at predicting what is going to happen but I follow every three month period and see how weather patterns develop. What we've seen in the Corn Belt coming in from the plains, Western Corn Belt, you know, that last two weeks ago when we had that forecast of the good rain and so on and we did get good rain in some areas. But about half of the Corn Belt got less than a half inch of moisture when the forecast called for an inch to two inches of moisture. It's going to be very interesting to see now, next week what this pattern plays out to be. Again, we're promised at least a half inch, maybe up to two inches through the weekend into next week and so on throughout the Corn Belt area. Right now it doesn't look like that's going to happen. But with thunderstorms they can pop up any old place so we might just get that. But I think it's going to be very critical to start getting the fill in of some of this moisture in some of the areas that haven't been getting it. Now, it's way too early to cry wolf right now because subsoil moisture levels are pretty good in most of the Corn Belt, very good in some. So, you know, if you just get this crop out of the ground it doesn't need much more moisture. As a matter of fact, that's wonderful for it to drive those roots down into the subsoil so it can take advantage of every drop of moisture that is in the five foot or whatever you've got. So, it's too early to cry wolf now or cry drought but these weather patterns have been pointing to the fact that we could turn off dry again in this Western Corn Belt area anyway. So, we need to watch those patterns very carefully.
Pearson: Doug Hjort, always good to have you with us. Doug Hjort joining us here on the Market Plus segment. Thank you for joining us, be sure to tell your friends and neighbors, we appreciate all of you checking in at our Market to Market Web site. For all of us here on Market to Market, I'm Mark Pearson, have a great week.