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Market Plus Video: Market Analyst Tomm Pfitzenmaier

posted on April 13, 2012

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Pearson: Welcome to the Friday, April 13, 2012 version of Market Plus here at our Market to Market website. Thanks for joining us. Tell you friends and neighbors and of course remind you local public television programmer if they are not carrying Market to Market they should so it is available to a larger general audience. Thank you for finding us here at our internet site. With us this week on the show and here on Market Plus one of our regular market analysts, long time market analyst, Tomm Pfitzenmaier. Tomm a couple things we didn't get to on the show and we've had some great and we appreciate your Tweets, we appreciate all that, the Facebook, and all the other comments that we get so we can pass these along and pass the questions along directly to our guests. So, we can make it kind of three dimensional. Amanda sends in a note and we didn't get a chance to get to this on the show and I really wanted to. What's your opinion on gold? What - has it done -- staying, is the gold thing over? What do you think?

Pfitzenmaier: I think gold is going to pull back a little bit. I heard it said this morning that if one of the big problems that we have in the U.S. which is debt, which I don't think there is any discussion, nobody is arguing about that. One of the only ways to get our way out of that sort of the chemotherapy to kill that cancer is inflation. And if you believe that and you believe we have to inflate our way out of it then that is probably going to be friendly to the gold market. And I am not saying we aren't going to pull back as much as, you know 1600 maybe 1500 on this pull back. Longer term I think you have to have a piece of gold in your portfolio to guard, to help guard against some of that inflation.

Pearson: All right. That's a good point. Of course all things, all stuff is going to be good inflation too. So are you friendly to farmland for instance Tomm?

Pfitzenmaier: Absolutely. I agree with your first statement. Whether I am friendly to farmland as much as it has gone up, I would guess the rate of growth if there is going to be continued growth, it is going to slow up quite a bit. Part of that is driven by profitability and I am not sure with expenses going up and commodity prices sort of stabilizing here I am not sure that profitability is going to be there to, you know push corn, push land prices higher, but certainly you would think land would participate in that.

Pearson: It was interesting this last week the Federal Reserve has been making comments all around saying oh, this economy is better. They are strengthening maybe they will cool some of the quantitative easing that continues. It is not Qe2 but just the continuous easing that they have had making dollars zero. Maybe they are signaling us that is going to change?

Pfitzenmaier: Yeah, I think that's part of the reason you saw the markets selloff this week in terms of equity markets and some of the outside markets as I like to call them. Because there is some uneasiness about how the Fed really is going to handle this thing going forward. So there is no question about it.

Pearson: We spent a lot of time on the show talking about corn and I don't want to chew up a lot of time in Market Plus talking it because we talked about it so much on the show. But Jason over in Murrayville, Illinois, a good town over there, he asks how low can new crop corn go because of a summer weather scare? You were talking about that. We talked about the big money, the funds are in corn, and you mentioned their big position in soybeans now. Could a big acreage number perhaps or something be a catalyst to put this corn thing lower before you hit the weather market?

Pfitzenmaier: I think we're going to have a big acreage number. I think we're going to get it planted fast. I think we're going to have 80 percent of it plus planted by the last week of April assuming the rain kind of straightens out after this weekend. So, yeah I think you are going to produce a lot of corn. I think unless there is a problem in the Northwest, I think you have a good shot of moving corn futures back into that $4.50/$4.25 range this summer. Now if after the first of - end of June things start to heat up and there is problems maybe you can get a bounce off that, but I think we're in for some, some fairly rough going for awhile.

Pearson: All right. So more corn. You don't think we're going to see much of an acreage shift?

Pfitzenmaier: There might be some. As I talk to guys in the Northwestern production areas they are a little concerned about the dry weather, the effects that is having on corn on corn, new crop beans have rallied enough that I think you are going to see a little switching maybe back to beans. But number one a lot of people have made fertilizer commitments. Number two people don't historically tend to shift that many acres. So and number three with this rapid planting progress when people start planting corn they just keep planting corn.

Pearson: When push comes to shove we go corn every time.

Pfitzenmaier: Now there might be an increase in bean acres from other areas. There were a couple million acres that were sort of not really accounted for in that acreage number. That could attract some beans. There is going to be some alfalfa torn up after the first cutting is taken off and some beans planted. So there is going to be some of that that beans will pick up. I don't see corn loosing a lot of ground there though.

Pearson: All right. Your advice was make corn sales? Make whole crop corn sales. These are attractive prices. Make whole crop soybean sales and at $5.52 or better you want to sell some new crop corn. You also want to make sales on new crop beans.

Pfitzenmaier: Yeah. You know $13.85 to $13.95 just under that old high is where we've got our orders tucked in. Now we dropped thirty cents or so away from that at the end of this week, but I'll think you will get some weather concerns or something that will give us a little bounce to let us do that. Now if you don't like selling, just flat out selling, and making that commitment find yourself a good option strategy and do it that way and leave yourself some upside if you want to.

Pearson: Wheat the laagered $6.80. You'd make sales?

Pfitzenmaier: Yes. Absolutely.

Pearson: Tomm Pfitzenmaier as usual appreciate you being on the show and of course being with us right here on Market Plus. And that is going to wrap up Market Plus for this week. Thank all of you for joining us. Again tell your friends and neighbors have them join us here. The more the merrier is our motto and of course contact your local public television programmer so you can see our entire show live as we air it and deliver it to your local public television station. Just call your programmer. You make a difference when it comes to programming on public television. So take advantage of it and make a phone call today. For all of us here on Market to Market I'm Mark Pearson, thanks for joining us. Have a great week.

Tags: agriculture commodity prices economy markets news Tomm Pfitzenmaier