Home Market Market Watch Gary Wilhelmi 5/21/2012 PM Comment

Gary Wilhelmi 5/21/2012 PM Comment

SHARE

Financial
Dow up 135, S&P 20 better and Crude oil $1.35 higher in a moderate recovery day
Dollar falls to profit taking down 32 at 80.92
Face book continues its swan dive below IPO price
There have been runs on Greek banks but another batch may be coming
Chinese stimulus efforts may not be any better than our failed attempts
France and Germany at loggerheads approaching the EU summit, the question is how Greece will exit the EU and the health of the euro
We have too many duds like JP Morgan, Face book and many moribund states with not enough dandies.

Livestock
Cash cattle were up $3-4 last week, the COF was positive and boxed beef gained $3 last week and another $2 Monday but cattle fell to a triple loss in the nearby
Cash hogs are called steady to lower, weights are up and so is slaughter
All this at a time when domestic demand is struggling
Memorial Day is covered so that demand is out of the way

Grain and soybeans
Dryness in the plains and southern Midwest excites the speculative screwballs but plantings have gone well
Development has its first test with germination
Intense volatility is something we can count on, but don’t be deceived by irrational speculative trade
Soybeans were expected to be 68% planted
Corn condition 70% good to excellent versus 63% a year ago. Winter wheat crop rating expected down 2-3%
Weekly export inspections were 13 m beans, 25 wheat on par with 27 corns again on the small side
Corn gulf basis falls
Watch topsoil condition as we advance into development time.

 

Financial

In the wake of the Face book fizzle, the markets will; return to the reality of declining Europe.

The perception is that the Euro leadership is preparing the ultimate departure of the Greeks from the EU and more economically important, the demise of Spain with Italy not far behind.

The repercussions on the US economy are mammoth.
Another point on Face book it came to market 1t 102 times earnings, whereas a solid investment in my experience is 13 times.
GM pulled the plug on $10 million of ads just before the IPO.
The first thing check out Monday morning is the European equities.
DAX and FTSE off .4%
Chinese leader talks of stimulus program but ours did not work
G 8 accomplishes nothing just talk of need to save the euro but how?
NATO confab pointless it is just a showcase for Chicago
French and Germans will be at odds at upcoming summit
No US reports today
Dollar 81.33 up 11
Crude oil up $.15 at $91.95
Gold down $4 at $1588
Dow opens 52 higher

Livestock
Cash cattle surge $3-4 ands begin the week offered at $125
Boxed beef up $3 last week
COF positive with total on feed at 99% and placements at 85% with marketing’s about unchanged helped goose the cash
Current breakeven $133.99
Kill 641,000 v 939,000 last week and hogs heavy at 2,116,000 v 2,089,000
Hog problems heavier slaughter, weights and spotty demand
Pork cutout down $1.20 with loin’s $2.59 lower and hams off $1.48

Grain and soybeans
Mixed night session
Corn plantings wrapping up and emergence on par
Texas wheat yields reported at 60-70 bushels per acre
Immense volatility stay with your plan don’t play the specs game
Chinese stimulus of questionable impact like our own, but would not hurt grain and oilseed demand
Europe has become a purgatory for our market environment
8 AM export sales always need to be checked
Development weather now takes command and so far it is smooth sailing