Home Market Market Watch Seed Consultants Market Watch Weekly Column with Gary Wilhelmi 12/7/2012

Seed Consultants Market Watch Weekly Column with Gary Wilhelmi 12/7/2012


The week concluded with a positive employment report as 146,000 non farm jobs were added versus 93,000 expected and unemployment fell to 7.7%, but no substantive progress was noted on our fiscal fiasco. This problem did not just pop up from the ground, it has been brewing for several years of collective mismanagement. Now we have rock heads on either side of the questions. Compromise has never been easy but it has been done. No mention of entitlement reform is heard and that is the elephant in the room. An avalanche of baby boomers is entering retirement age and their hard worked for dreams may not come true. Empty talking heads speak of 2% GDP growth as being the new normal, well that’s not good enough to maintain the life style many of us have experienced.
January soybeans were within two cents of their $15.00 resistance Thursday with light profit taking early Friday. Corn exports were a record low at 47,000 tons and March corn support is near at $7.40. March wheat was approaching its $8.45 support despite many old crop concerns in the US plains, Argentina wet zone, Australia and the Black sea region, but all are old news, and exports are just not very good. Soybean export sales were 1.14 MT with China taking 509,000 tons with another 10 cargoes, thought to be working.
Brazilian soybean production latest domestic estimate is for 82.6 MT and Argentina is over 50% planted to beans. US plantings are expected to rise, particularly in corn in 2013, but nature will sign the final check. Supply-demand carryovers were expected to be about unchanged. Reduced tows have been ordered by the Coast guard on the Mississippi, due to low water levels and no obvious replenishment is foreseen, as this is a long term cycle.
Cattle and hogs are at technical extremes with Feb cattle near resistance at $133 and Feb. Hogs, likely over sold at $83.65 down from multiple tests of their $88 high. The holidays are normally a slow period for pork demand. The cash call for cattle was $125 or steady to $1 lower. Volume in all venues has been down because of fiscal uncertainty.
A mild fall has improved wheat prospects in E. Europe. The Army corp. of engineers will not increase the flow of water into the Mississippi from the Missouri, as rock removal and less of a drop in water level makes it unnecessary. Watch snow fall amounts east of the continental divide as that run off will help replenish the Big muddy. Palm oil had a down week as high stocks depress, while soy oil business has been quite good. At mid day March corn has been as low as $7.35 below the $7.40 support, but the close is the only price that counts. Drought spreading into Illinois, Indiana, Kentucky and Tennessee.
Fed meeting next week will be free from electioneering pollution. University of Michigan consumer sentiment drops to 74.5, whereas 82 was expected.