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Market Plus: Market Analyst Jamey Kohake

posted on March 23, 2012


Market Plus: Market Analyst Jamey Kohake

Pearson: Welcome to Market Plus here at our Market to Market Website. Mark Pearson and here with us this week is one of our regular market analysts Jamey Kohake. Jamey, good to have you here. I guess we had a lot of great emails from a lot of our listeners out there. I shouldn't say emails. I guess they were Facebook and Twitters and other comments and we love those. So, by all means send them in. One of them was about spreads and you talked about spreads on the show and you still like them.

Kohake: I do, Mark. I like the corn spread the best old crop, new crop, buy May, sell in July, sell Dec. One question I have is where can that spread go? I think it could go out to 110. We have been floating around the mid-80s this week, 83 is -, low 70s would be your next level but I think eventually we will get back over a dollar in that spread.

Pearson: Well it has been an interesting one to watch and appreciate that note from Doug out in Washington that asked us about that. We had a couple of other questions from listeners we want to get to as well. We had D.J. up in North Dakota talking about these November calves and if we plant all these acres you are talking 94, 8 - some of the analysts are talking over 95 and we get good weather, Jamey, we could be looking at a tremendous carryout. We could be looking at 425/450 corn and those calves might be very dear.

Kohake: Right. I think longer term there could be some trouble with that. If that is the case turn on yields plus 160. That would obviously build a carryout back over probably 1.5. I think technically we could retrace back to 161 area. This correction that we just had was healthy. It was needed for bull markets. Supplies are still - since the 50s, but I think once you get back to that 160/161 level for November I would be a seller.

Pearson: The other thing we want to touch on is soybean acreage. You are talking 75 million. Most of the analysts are talking that. Boy, this has been a nice rally of new crop beans.

Kohake: It has been. Really the whole entire bean market has been in a rally since mid-December. A two dollar rally in beans. We had a 2.35 spread roughly ratio versus the corn over a one year high right now. The market is trying to buy acres. I don't think they are doing a very good job at all. See a few combines rolling to Southern Illinois this week and like we talked about earlier they are trying to catch this 30 cent premium September versus December corn and have that to the elevators by Labor Day.

Pearson: Well, it is an interesting environment with the tale of two crops. I know we talk a lot about this corn and bean market and what is happening there. We also had some very good questions about wheat and what your thoughts are on the hard red winter wheat still being able to put in some kind of rally.

Kohake: Right. I think get one more pop in there. Wheat is just a big-time follower of corn right now. We did get some good moisture down in the Southern Plains this week, but we are progressing really fast, really early, and maybe setting ourselves up for a big-time frost like we saw back in 2008. I am not to anxious selling right here right now. Chicago gets back up around 710/720 and look at an area of KC back over 750.

Pearson: All right. So there are some opportunities out there to make some sales but we are a ways from those at this stage in the game. I want to ask you real quick about crude oil. We can't have a week like we had with that huge spike on the rumor about Iran and not wonder if that is not pretending something for crude oil prices.

Kohake: It could be longer term. Brent Crude, the worldwide crude, is the leader of the whole entire energy complex. That is what has been pulling the WTI up. Their supplies are tighter than the WTI, U.S. Crude Market is right now, 401/409 is your range right now in the crude market.

Pearson: You are getting kind of bearish on the metals. Not that you were ever a gold bug but you think this may be behind us now with what is happening in China.

Kohake: I do. I don't like metals right now. Long-term setting up for a big - like a portfolio like deal. I will still trade them, you know, day trade, weekly trade, the range is back and forth. That PMI number out of China this week was bearish. It is a deflationary number and I think you can still see some money come out of metals maybe shift over to ags this summer or even to the stock market if you hold 1400 in S&P, but the worldwide markets right now are pretty soft. There is not a whole lot positive to come out of Europe and/or China right now.

Pearson: All right. Well, Jamey always some great insights here, appreciate you being with us, and of course thank you for joining us. Don't forget if you are enjoying Market to Market on the internet make sure you saw it at your local public television station as well so it is available. We can help bridge that gap between farm and city and provide you with agriculture marketing information that you will find profitable. So, appreciate Jamey being with us this week and from all of us on Market to Market, I am Mark Pearson, have a great week.


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