Home Market Market Watch Seed Consultants Market Watch 2/23/2013 Weekly Column With Gary Wilhelmi

Seed Consultants Market Watch 2/23/2013 Weekly Column With Gary Wilhelmi

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A trifecta of negative factors is impacting our wallets, leading Wal Mart to dampen advance sales ideas. Stocks wobbled last week, as we approach the sequestration date of March, 1. Crude oil has fallen several dollars as a major hedge fund may have been forced to liquidate positions in crude and the metals. Some see gold dropping to $1430. The dollar continued to rise at $81.47 Friday morning. The intensifying currency wars could drive the dollar up to 89. Currency combat means the devaluing of foreign wampum, and that hurts our exports directly.
Euro zone 1Q GDP is estimated at -.3% growth. European stocks whistle by the graveyard periodically, but their under pinning is weak.
Higher payroll taxes, delays in tax refunds and perhaps $5 gas cut into our budgets and more taxes are coming as the healthcare system is phased in. Support on the Industrials is at 13,550 or down at 12,500, which would be about a text book 10% correction. We have broached 14,000, as earnings for 4Q have been 75% better than estimated, but that contrasted with lower expectations. 10 year bond yields have been around 2%, but watch for increase as the Fed indicates they are trimming their stimulus effort.
March soybeans Friday morning ran up to $15.16 ½ and if they close above $15 a $15.50 target will be possible. Wheat and corn are wrestling with their support levels, at $6.90 on March corn and $7.00 March wheat.
Weekly export were up 55% versus the 4 week average in wheat, but beware the rising value of the dollar as that is a deal breaker. Corn continues to flounder and soybeans were light, but that is because of the Chinese 10 day lunar holiday. China is presently rumored to getting back to business buying 9 cargoes. Brazilian soybeans are estimated at over 81 MT and Argentina about 53 MT. and that’s plenty. Port strikes are slowing loadings in Brazil, but that’s’ normal, and their harvest is about 25% done. Ideas on the USDA outlook for corn were running at 14.5 billion bushels and 3.4 billion beans, but only the actual spring weather will fill in the details. Extremes are the order of the day as the grains are over sold and the beans over bought. The computer screw balls are driving volatility as evidenced by the one day $.50 jump in beans, and that’s not going to change.
April cattle and hogs took a beating last week leaving support at $127 for cattle and $80-81 in hogs. $100 per head losses are reported in cattle. Chinese questions regarding pork additives were a major depressant. Snow caused one day delays in moving cattle as slaughter feel to 98, 000, but a quick moderation of temperatures will cure that. The cutting of our disposable income lands squarely on meat demand.
The USDA outlook conference estimates on crop size are 14.25 billion bushels of corn, 3. 25 beans ad 2.16 billion wheat, and that is if we have normal weather in spring and summer. I suggest just writing these ball park numbers down and then and see what nature deals us.