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Market Plus: Mar 29, 2002

posted on March 29, 2002


Market Plus: Mar 29, 2002

Pearson: Welcome to Market Plus here at our Market to Market Web page. I'm Mark Pearson, host of Market to Market, a little bit of a cold, a little scratchy but it doesn't effect our analyst Tomm Pfitzenmaier and he is ready to roll. Tomm, on tonight's show we talked about livestock, the pressure in the cattle market, pressure in hogs, USDA report confirming what we've been talking about, some concern about bigger numbers. But one of the things we didn't get to talk about was the financials really and we had some pretty amazing things happen this week particularly gold as a for instance.

Pfitzenmaier: Yeah, we're a little negative on all the agricultural products but gold is in the process of breaking out and breaking up to some new levels. That's an indicator that needs to be watched pretty closely. The CRB index went up and made new highs. Both of those are overall indications of a general rising in commodity prices. So, despite the negativity we had on some of our ag specific products, I think overall you're starting to see a sort of change in attitude and that certainly could spill over and start to benefit, maybe is already starting to benefit on the beans side, trying to benefit maybe on the wheat. So, I think that's one area we need to keep a close eye on.

The other one is interest rates, interest rates starting to creep up here a little bit, watch the ten year note, I know a lot of farmers have their farm mortgages based upon some sort of a floating thing off the ten year T-note, watch that pretty closely. Maybe it's an edging opportunity to sell that T-note and get you mortgage rates stabalized a little bit here. There's some things that are shaping up here that I think are creating opportunities for farmers over and above just your standard corn, bean, cattle and hog opportunities.

Pearson: You mentioned interest rates going higher which again is a concern if you're not on top of it and probably that ten year treasury note, hedging that would probably be about your best bet wouldn't it?

Pfitzenmaier: Well, you know the farm credit system, floating mortgage is based on the ten year note so it's a pretty direct hedge if you want to hedge interest rates to go pop right over there and get that done. So, I think that's one area where farmers are vulnerable. If we start to creep these interest rates up and that's one way to start to kind of protect yourself on that side of it. Pearson:

That's interesting holidays tend to be kind of a turning point in a lot of the commodity markets. On that front, on the financials certainly the metals, maybe we've seen that.

Pfitzenmaier: We may have.

Pearson: We'll look back on this a little bit later on and see how it turns out but we appreciate it very much. Tomm Pfitzenmaier joining us this week on Market to Market and of course thank him for joining us here on Market Plus. I'm Mark Pearson for Market to Market.

 


Tags: agriculture cattle commodity prices gold livestock markets news pigs USDA