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Market Plus: Market Analyst Sue Martin

posted on March 16, 2012

Market Plus: Market Analyst Sue Martin

Pearson: This is the Friday, March 16, 2012 version of Market Plus. Thanks for joining us here at our Market to Market website. With us this week is Sue Martin and we have had some great questions coming in on Twitter and Facebook. And keep those questions coming and I want to say thanks to Doug in Washington and D.J. out in North Dakota and Phil, of course, in Canada and Pete up in Canada and Jenny and the whole crew. Just a lot of great questions. Hopefully we covered them a lot of them in the show, but some of them we didn't have a chance to pursue, Sue, because there is so much going on in these markets when you throw in this weather pattern that is out there and that's what I want to talk to you about here on Market Plus. Whose weather prediction are you buying? Warm winters, they tell me it has a high correlation, warm and mild winters, with the above normal temperatures in the summer.

Martin: Well, I think I am going to go with the fact that I think our summer is going to be a nice summer. I think that we are going to get in, get the crops planted, have nice planting season, and then as we get in towards June to July and it depends, you know, the La Nina is fading very quickly. Now we also have the North Atlantic Oscillation, and the Artic Oscillation with us, and we need to see how fast those start to fade away and go back more towards normal. That will make a difference. But I think we are going to fade away very quickly on this La Nina, and then it is a matter of how fast we are into an El Nino. You start into an El Nino and you're going to start picking up some nice timely rains. So, I am looking for a decent summer.

Pearson: A couple of questions have come in from people and of course it all comes back to the weather is still the main determinate, but Doug out in Washington asks the question can wheat be the leader this year? And you were saying on the show that's really kind of what has been happening here lately.

Martin: Well, it certainly looks like it especially when you take corn and wheat to each other. However, if we have a wild grain market that starts to push, I think it is going to be the corn market that leads and I think it will be the cash market that leads the corn.

Pearson: Jenny had a great question and we don't usually go this far out, but you were talking about a 95 million acre corn crop. But you have been there for awhile and obviously with the Dakotas coming back online this year hopefully with the conditions we have that 95 million is certainly a real possibility if not more so. Her question is should we be looking at 2013 crop sales?

Martin: No, I can see maybe making some forward sales and I'd do hedge to arrive on the 2012/13 crop. I would not be making any 2013 crop sales and I know there is entities out there, analysts out there saying to do it. For me I cannot recommend it and here is why. There is such huge demand. You had such a horrific winter in various parts of the world, and then there is other parts very dry, having problems, like in China. You have got growing demand. You have a middle class population. Largest middle class population in India and India in time is going to end up becoming a net importer rather than an exporter. Last year they increased their poultry production by 15 percent. You have got China looking at an increase in pork production by 10 percent. China's corn market is up against 10 dollars. New all time highs. Our corn market is 17, what is it, 17 percent below - 16/17 percent below a year ago. We make a very good bargain for them. I think that when you look at going into next year our old crop could be very, very tight, and our crop could have been understated last year. If that is indeed true, then as you go through this summer you are going to have a real tough pull until you get into August because we are going to have a very early harvest, and then things with change. But I think even a good crop, Mark, you could have very good prices next year just on huge world demand.

Pearson: Sue, appreciate your insights. Thanks for being with us on the show this week and of course here on Market Plus. Sue Martin, one of our regular market analysts and of course for all of you that join us on the internet don't forget about Festival. It is underway on your public television station. This is the time to step forward and if you enjoy and appreciate our service here on the internet and of course if you would love to see us, see this program on your local public television station, if you can help us out there by phoning in a pledge and becoming a supporter of Market to Market, this is the time to do so during Festival on public television. So from all of us here on Market to Market who bring you a new show every week of the year, 52 weeks out of the year, thanks for being with us. Have a great week.

Tags: agriculture commodity prices economy markets news