Pearson: Hello everybody, this is Mark Pearson on the Market to Market Web page. Glad you've joined us here at our Market Plus segment, thanks for punching us up and hey, be sure to tell a friend about the Market Plus segment, an additional way to hear analysis and commentary from our regular market analysts. This week, Virgil Robinson joins us and Virgil, everyone is talking about soybeans and soybean production and Brazil and is there a rust problem. You sent me a chart via e-mail which I thought was very impressive and it showed the difference between prices in 2002 in April on the Chicago Board of Trade which I think were around $4.60 versus where we closed Thursday afternoon around $6.22. That's quite an improvement, Virg. What's ahead? I mean, we've got folks talking eight dollars, we've got people saying oh, we've got big production coming, the delays are going to come up, you mentioned in the show we've got a lot of these big funds way long on this bean market and you also mentioned on meal. What's ahead Virg, what do you think is going to happen?
Robinson: Mark, I think the futures market is positioned here short-term wise for some type of corrective leg and they normally come in the fashion of either a pullback in value or a phase of price consolidation. And given the fact that the speculative community has record large positions in both soybeans and soybean meal futures it's likely this corrective phase will come with a pretty sharp pullback in value. Now, there are some fundamental factors and that chart eludes to one, Mark, where as of March 2003 versus the previous year, 2002, the combined inventories, beans in the United States, projected production in Brazil, Argentina and Paraguay, the combination of those two is actually about ten million metric tons larger than it was the previous year yet futures prices in Chicago are $1.60 higher. I think there are some harvest delays, particularly in northern Brazil, some congestion problems in those ports that will likely and most assuredly be corrected as they aggressively position themselves to assume the export market in the very near future. When the prices discovery process in Chicago realizes this it's going to trigger a phase of profit taking from that speculative community and it's likely to be very, very abrupt and very sharp in nature. So, while the trend of the futures market as we visit tonight in both beans and meal is up and clearly the trend, as measured by futures contract value, it is up. It can change, Mark, abruptly and as quickly as one week's time. Therefore, again, the idea of trying to manage the risks associated with that situation in South America and the realization we have less than three weeks worth of inventory in the United States seems to me to be best accomplished with some type of option strategy.
Pearson: Virg, in addition to being a strong fundamental analyst, you've also been kind of a technical analyst over the years. As you look at these long charts, I mean, it seems like we had been base building here for a while. You know, is there a technical possibility of a shot higher up here after a break?
Robinson: Yes, absolutely Mark. And I know that eight dollars has been discussed and seven dollars has been discussed and clearly I would be out of line, I think, and mislead people if I were to suggest that could not happen. Certainly it could happen. We haven't even got the crop in the ground here in the United States, have no clue as to how it will grow and how it will produce. And again, with less than three weeks worth of usage on hand and arguably less than that, certainly that kind of a target or that kind of a price is attainable. But again, Mark, as I mentioned earlier the trend of this market and the belief that this market can do nothing but go higher could change very abruptly and as quickly as in one week's time and that's difficult for most of our producers and listeners to handle.
Pearson: We're going to wrap up Virg, real quick just a recap, get rid of old crop at this stage in the game?
Robinson: Mark, I like selling old crop and repurchasing and I've chose here of late a vehicle that keeps you in position for moderate price improvement in the form of those bull call spreads.
Pearson: Very good, Virgil Robinson, thank you so much. That wraps up the Market Plus segment here at our Market to Market Web site. From all of us here at Market to Market, I'm Mark Pearson, have a great week.