Pearson: Mark Pearson here with Market Plus for this week, our guest Sue Martin of Ag and Investment Services. Sue Martin, we've been talking about the grain markets, the focus really has been more on corn. There's been less interest in talking about soybeans or a bull scenario for soybeans because everyone keeps talking about the dampening effect of South American production. You're saying they're selling a lot of that crop down there already, if they have a problem it could be explosive for the U.S., talk about that.
Martin:I think it's very explosive because as they sell out of their crop ahead, if they run into a weather problem they're going to have to maybe buy some of those sales back. In the meantime it tightens world supplies even greater and of course puts the panic back to the U.S. to buy and also for the crusher to need to own beans as well. So, with our carryout at 155 million bushels, now the expectation is, with the recent rains that we've had, that we're adding bushels back in and I don't think we're adding over a bushel to the acre, maybe a bushel and a half at the max back in.
The next thing will be how many acres of beans do we really have out there and of course in Nebraska what beans are in Nebraska is on dry land acres for the most part and that's where poor corn was that the beans are bad too. When you look at the states in the Pro Farmer Tour, while they did not take in account Missouri, Arkansas, the Red River Valley which basically raises a lot of beans has very little up there in supply because of floods early in the season and so there's a lot of, I think, still unknowns in this market and I think beans is a market that's still going to evolve.
But, as we run into problems in South America, not to mention if they do have the increase in economical problems, that's going to start to allow for uncertainty in the world trade and it will come back to us as well. The fact that China is buying as early as they are, when they are touting that they've got a crop 500,000 metric tons more than a year ago says something.
Pearson:Alright, so we'll be on the lookout for maybe a bean market later on. So, we want to market accordingly so we have something to sell then. Let's talk about hogs, near term, you talked about on the show, we might see the low earlier this year which is interesting. We're hearing these big corporate operations, they're dumping right now.
Martin:That's what is putting the pressure on and maybe this was a good thing, we're getting it out of the way earlier and getting it done and over with. I look for October hog futures, I don't think the lows are in yet. I think we can take October hogs down to maybe 30.40, 30.22, something like that, but that should start to put in a good floor on the October hogs. But I think we're going to have earlier lows on the hogs this time and of course, the one thing we don't know about is, the unknown in the meats is, what kind of a winter do we have.
If we have a tougher winter than last year weight gains won't be as good, you'll have, in the cattle you'll have poor weight gains, lighter weights coming where this year they've done well gaining weight all along, you don't have near the numbers, so that will just set you up for a bull market in meats next year.
Pearson:Alright, on that note, Sue Martin, we'll wrap it up. That's Market Plus for this week, thanks for joining us, I'm your host Mark Pearson.