Pearson: This is Mark Pearson for Market to Market and this is our Market Plus page. We're really glad that you've joined us. Tell your friends about the Market Plus page and have them catch some additional market commentary from our market analyst. This week Doug Hjort is with us and is one of our long time analysts. Doug, this wheat market is kind of hard to stay much of a bull with the activity we saw this week. What's ahead on wheat?
Hjort: Well, I think one thing to remember about wheat, and I try to point that out every once in a while, and that is we are a residual supplier to the world, the United States is. So, what that means is that all the other countries get to sell their wheat first and then we can come in and pick up whatever is left. Now, naturally we have our regular customers, you know, that keeps the business going short-term. But we have not been able to pick up any of that extra business. This year primarily because even though Canada and Australia have had terrible crops and their exportable supplies are down, we've got the former Soviet Union and Eastern Europe that have very strong crops two years in a row. So, they're able to export a little bit of wheat. Now, I think we're about at the point to where these people are not going to be able to keep on exporting very much more. So, as we go into December/January and March, then I think we can see our sales start to pick back up a little bit. That's been a real problem in this market for some time, the low export sales that we've been making.
Just in a week or so ago, we started out pretty good during the summer, but a week or so ago our export sales dropped below a year ago level and that can't stay that way, otherwise the USDA is going to have to pull back on their export projections. I think that will happen but that still has to happen before our wheat market can really recover.
Pearson: And you're saying for a two, three month probably recover to get back to the four dollar level based in Chicago?
Hjort: Yeah, I think we've done most of the washout now, it obviously depends on what happens with corn and the relationship to wheat and so on. But I think maybe we can stabilize here and pull back up somewhat.
Pearson: We didn't have much time to talk about hogs on the show tonight. You're getting the question, you're out talking to people, I get it all the time, you know, it was ugly in 2002 in this hog business, have we reduced the herd? What is 2003 going to look like?
Hjort: Well, it's going to be better. If you look at the futures for next late winter and spring, they're higher. I think we can honestly get to those cash prices. So, you know, we're looking at something at least profitable for the hog industry for a while. I noticed this week that feeder pig prices pulled back at most markets, maybe three, four or five dollars a hundred weight for those 40-50 pounders.
This might not be a bad time looking at that feeder pig price, looking at feed price now and the distant futures contracts to go out there and buy some feeder pigs if you're in a position that you can do that. And then look for an opportunity, not right now but on down the road in the next month or two, to maybe lock up some of those prices farther out. It looks like there can be some profits there. It's an opportunity, not to make big bucks, I don't think we have big bucks left in this hog market anymore because of the concentration, but this is an opportunity you can make some money and I think you should take advantage of it. Pearson: Good points Doug, as usual we appreciate it. Doug Hjort, our analyst this week on our Market Plus program. For Market to Market I'm Mark Pearson, thanks for joining us.