Home Market Market Watch Gary Wilhelmi 5/16/2012 PM Comment

Gary Wilhelmi 5/16/2012 PM Comment

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Financial
The haunting presence of the Greek tragedy trumps positive industrial production and housing numbers data to win the day
A new wrinkle was the European central Bank stopping monetary policy help for some under capitalized Greek banks.
Speculators are being brutalized in crude, gold and some other once hot markets.
Gold support is at $1500 and Crude at $92 with both in range
The dollar is near its high as European currencies reflect their desperate condition
Watch European and Asian equity markets Thursday morning
Dow floundered to a weak 12,599 conclusion
Next support is at 12,500 and 1300 on the S&P

Livestock
Cash cattle are called $1 higher
Choice beef backs off $.59 to $191.02, but steak cook out offering make a pre Memorial Day appearance
Placements are expected to lighter in Friday’s cattle on feed supporting deferred contracts
June cattle range runs from $114-117
Ribs lead pork cuts this weekend
Cash hogs called $1 higher
Larger hog slaughter projected but kill is 10,000 light through Tuesday
June hog range $84-87

Grain and soybeans
Funds buy 18,000 contracts of corn pushed December corn to test resistance at $5.30
Short covering drives wheat up and through $6.30 resistance and we look toward $6.40 and 6.50
Dryness in western winter wheat area is fundamental key
Soybeans are at mid range between $13.80 and 14.40 on the July contract
Corn basis remains strong as bins are being swept out
Long term corn prospects are for a bearish 14.8 billion bushel crop and a 1.8 b carry over up from 850 m
Volatility reasserted itself today as the markets are full of speculative screwballs
Corn is enjoying the perfect weather as it rides toward a one month early conclusion of plantings
If June and July are extra hot corn will suffer, but we don’t know that.
Watch weekly export sales tomorrow morning for signs of Chinese involvement (corn and soybeans)

 

11:43 update

ECB stops monetary policy operations to some Greek banks due to recapitalization issues
Dow pulls back to 32 higher
DAX slips to negative side off .4%
Cattle and hogs up a little and down a little
Tightly supplied corn up 5 on the old crop, July beans just 2 lower and July wheat up 13 on W Plains dryness and on going concerns about Ukraine and Kazakhstan

10:24 update

Cash cattle expected $1 higher
Choice boxes over $191
Cash hogs called steady to $1 higher
Good cook out weather as we head toward Memorial Day a prime BBQ holiday

 

10:24 update

Cash cattle expected $1 higher
Choice boxes over $191
Cash hogs called steady to $1 higher
Good cook out weather as we head toward Memorial Day a prime BBQ holiday

10:08 update

Dow up 75 after positive housing starts at 717,000 or +2.6% and industrial production 1.1% higher
DAX off .2% on lingering Greek political crisis
China buys 900,000 tons of corn, Along with a 480,000 switch from unknown category
S Plains dryness reducing wheat yield potential
China raises soybean import forecast by 3 MT to 58 MT

 

Financial
Dow wobbles and may open higher but Greek tragedy persists
Interest rates continue to rise in junk Spanish and Portuguese bonds
S&P 1330 below support at 1340 and 1300 is next
Housing starts expected to rise to 690,000 for April
Industrial Production expected up .7%
Another Greek election next week but no majority possible in fractured political environment
Fed minutes today at 1 CDT
DAX up .2%
Crude falls further to $92.69 off $1.29 on poor demand
Gold down $5 at $1540
Dollar steady but near high at 81.78
Nikkei down 1.1% and Hong Kong 3% lower

Livestock
Cash cattle offered at $122-123 in the south and $125 up north
Boxed beef $.58 higher on choice and $1.58 select
Weekend features star cook out cuts select grade Porterhouse at $6.99, T-Bone $6.49 along with Chicken led quarters $.58 and assorted Pork Chops $1.58
Cattle coming off winter pasture are running out
Hogs over 20 day moving average line
Pork cutout up $.28 with loins $.94 higher and hams steady
Slaughter up 8000 in cattle and down 10,000 hogs

Grain and soybeans
Beans resume correctional course to downside
China corn and soybean export sales?
Kansas State sees 2-2.5 million more bean plantings
Illinois, Iowa and Indiana farmland up 19% in value in 1Q
Weather is fine
Hot June and July could trim yields but who knows
Rain in the Ukraine possible and needed after winter kill losses of about 33% and that also applies to Kazakhstan