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Market Plus: Jan 03, 2003

posted on January 3, 2003

Market Plus: Jan 03, 2003

Pearson: Welcome to the Market Plus page here on our Market to Market Web site and I'm Mark Pearson. Glad that you've joined us, Sue Martin with us this week. It's always a pleasure Sue to have you and let's talk a little bit about -- you talked about beans being kind of the glamour crop for 2003, why is that?

Martin: Well, I think first of all the world demand for veg oil is really big and last year with losing so much of our canola and rapeseed crops around the world that set the tone that soybean oil would be probably one of the main targets and it's reasonably priced. The other thing is, is that South America, their weather keeps ebbing and flowing. Right now it looks like it's pretty decent and back to okay but we don't look for that to last and of course we're thinking that the conditions that set in early will probably help out the -- seeing the rust show up as we get into about the middle of the month of January.

The other thing that we have to keep an eye on is, it's very dry in the Midwest and in the U.S. and with less acres and as dry as it is, corn is going to go in easy and we're going to see a lot of corn acres planted but we're going to need some moisture and we're starting to notice in the drought monitor that the southern half of Iowa, especially the southern third, a chunk of Missouri on up through the northern maybe good third or half of Illinois is certainly very dry. And maybe not extreme yet but on the very dry side. So, there's going to be some weather problems and if you back up South America with some issues and also not to even mention what their economy is doing, they're having some problems, international banks are leaving that country, Lula has just been put into office as President and of course he talks about giving land back to the poor. Well, if you do that how do you do it? You've got to take it away from somebody and that's not going to be good, probably could create some revolts and can the poor really pay for the bills? I think that it's going to be interesting to see what happens in Brazil with what's been going on.

In the meantime the dollar is softening, overall it was maybe stronger the tail end of this week but it's softening and I think that if you take all of those problems down in South America, they can have a big crop, we proved that this last year and we still had the demand and better prices.

And then you put another domino behind it or frosting on the cake with dry weather here and we've got a market that's going to be extremely prolific and world buyers are going to be real concerned.

Pearson: Sue, I want to talk about the cattle market, you've been friendly to cattle for some time, we're over eighty cents on the board. On the show you talked about over eighty-one dollars, I think on April, those are selling opportunities aren't they?

Martin: Well, I think they are. Remember our all time high is around eighty-four cents and so you're not far from those and we still have the first quarter to get through here in the New Year. The April contract, we know that we're going to have less numbers and the trade is certainly looking at that, demand around the world is getting better and of course one thing that's helping us is that we've gotten past the mad cow, remember all the BSE talk and all that, concerns and so demand is starting to grow back for beef and pork.

Yes, we have Russia growing back. They're solidifying their poultry industry, that's why they took the stance they did a year ago or this past year in March on poultry bans from the U.S. and now they're doing it out of parts of Europe and also out of Brazil. But the thing is, is that they can go ahead and expand their livestock industry but they need grain to feed that livestock and while Russia is growing in grain production too, they're slow to be doing this and on top of it the quality that they have is not as good as what a lot of the world wants.

So, just like for example wheat coming out of the Black Sea, the quality was very poor and some of these buyers around the world like our quality and that's the one thing the U.S. can be proud of is we have good quality.

Martin: Good points, Sue, as usual, good to have you with us. Sue Martin, joining us here on the Market Plus page here at the Market to Market Web site. Thanks for being with us.

Tags: agriculture commodity prices Mad Cow markets news