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Market Plus: Market Analyst Naomi Blohm

posted on November 4, 2011

Market Plus: Market Analyst Naomi Blohm

Pearson:  This is the Friday, November 4, 2011 version of Market Plus.  Thanks for joining us here at our Market to Market web site.  Naomi Blohm our analyst this week, always good to have her with us.  

Pearson:  Naomi shared a lot with us on the show today.  I want to come back to the corn market.  Government report is coming out this week and of course everyone is trying to guess where this thing is going to fall.  And I will tell you what, I am a lot older than you because I have been watching government reports for a long, long time, and I have never seen the revisions and the changes following these reports as we have had in the last four years.  I mean it has been phenomenal.  So yes, we have got reports coming out but I am probably going to wait and see what they revise to at this stage in the game.  What is your take?  What do you think you are going to see on the corn and the bean numbers as - when those reports come out the middle of next week? 

Blohm:  I think that we are going to see the yield for corn down just a little bit.  I think they want to reflect what is out there because they didn't do anything to it last time.  And so I think with that that will be enough to make the market a little bit excited but at the same time it is already priced in and the bigger thing to focus on is what they do with ending stocks.  Ethanol is totally on target for projections and so the corn use there is right on.  The question of course is going to be more along the lines of feed and along the lines of exports.  So what people need to be really watching is how the U.S. dollar fluctuates next year.  That is going to be the biggest thing and with the report I have a feeling this one is going to leave us limit up or limit down, and what I would offer to people as a suggestion is that rather than lie awake at night wondering what the report is going to say just be ready for both scenarios because it really is potentially likely.  Be ready to know what you are going to do if you see the market rally substantially and how much are you going to make for - sales and on the flip side if prices should look like they are going to go lower maybe it is worthwhile to do like a quick December corn put just right ahead of the report just to make sure you have got some protection there if that is your concern.

 Pearson:  You mentioned on the show that obviously more corn acres in South America which has been kind of a new trend down there and we have certainly talked to a lot of producers that have come up through Farm Progress Show and other events from South America telling us we didn't miss the fact that you guys are getting seven dollars for corn up here.   With those numbers and we look at what the world numbers are going to look at - there could be the potential there for some down side, and we were - really and you mentioned feed and we talked to a lot of livestock producers, a lot of feeders particularly out in Colorado, Kansas, Wyoming, and that region.  They are all feed and wheat.  They switched to wheat some time ago.  

Blohm:  That is very true and I think the market is very aware of that and at the same time as far as the wheat being used as a substitute for the corn, I don't think the USDA has admitted to that as much as they could right now.  So that might be a surprise for the wheat as far as the ending stocks go because even at last month's report when everything came out, and all was said and done, we all looked around and said what about wheat?  You know we talked to clients who have told us what is happening out there.  I don't think the USDA reflected it.  So hopefully they will on Wednesday.  

Pearson:  All right.  Well it will be an interesting report. You are from Wisconsinand so I just always want to talk with dairy with you when you are here.  We don't get to talk much about the cheese market.  We don't get to talk as much about what is happening with milk prices because there are so many moving parts to it.  But we have seen good milk demand.  We have seen decent milk prices.  We have seen cow numbers starting to creep up just a little bit again.  We have got some good times in the dairy market.  What is your take on whether or not it is going to continue? 

Blohm:  That is a fabulous question and right now there is not any supply threats.  And you are right we are seeing production numbers start to increase.  So with that being said milk is entering the third year of the cycle and probably we will see pricing start to edge lower.  Now what might be interesting that rather than see the market just crash lower like it can do maybe we will just see market prices just come back down a little bit to the fourteen dollar area, not a little bit, you know below a lot of people's break even.  But I think that just with the swing of things and with the economic uncertainty we will probably see that set back come.

 Pearson:  All right.  Naomi Blohm thanks for being with us this week on Market to Market and here on Market Plus as well.  And from all of us on Market to Market I'm Mark Pearson, thanks for watching.  Have a great week!

Tags: agriculture commodity prices economy markets news