My old friends in Montana are shoveling, while here around Chicago we are bailing water. Flooding concerns have firmed the Mississippi River corn basis. It the weather guessers could tell me what the jet stream is going to do I would listen, but that’s a tough call. This past week the jet stream ran northeast from Houston to Michigan carry it soaking Gulf moisture, and then it slammed into cold Canadian air setting off violent storms. Here in Chicago the temperature went from 70 degrees Thursday to 35 Friday.
Spring wheat plantings are being set back, but Midwestern concerns are premature. Let’s wait and see what May is like before reacting in the market. We now must hope for normal rain, even after as much as six inches this week. A drier forecast now projects into early next week.
Wheat condition was 36% good to excellent last Monday, and will likely contract due to the freezing temperatures. Export sales were positive in wheat as the Chinese SRW purchases were entered into the report. Soybeans sales are better than normal because of the Brazilian shipping delays but that is changing. Corn old crop sales remain light as there is very little of it. If prices fall from here watch for a pick in overseas buying of corn to increase in response. Global wheat supplies are adequate save special purpose buys like the Chinese in SRW.
The dollar has been churning, so not guiding export activity. That same pattern has also been in effect in stocks. The S&P, has support just below at 1530 and the 1474. Economic reports have been uninspiring, and earnings are coming out mixed after being 70% constructive in 1Q. Europe despite its claims of positive policy actions is in danger of falling off the economic cliff. Chinese growth fell to 7.7% from 12.6% a year ago. Watch Chinese real estate as they are over built and at risk. Gold squashed the foolish speculators and has now fallen to below $1400 from $1800 a year, or so ago. WTI crude has dropped to sub $88 from $110, as supplies are adequate. Some of my chart buddies think crude could fall to $75 or less. Watch the Yen as a currency crisis similar to 1987 might be brewing in Asia.
Meat minced around near their lows of $120 on June cattle and $88 on June hogs. The economy, despite the protestations of those clowns out east is still a struggle for many of us, and meat demand is a clear reflection.
Exports of meat are light at 10,200 tons of beef last week and 13,000 tons of pork. Chinese bird flu is trimming their feed demand and is not under control, so watch it. Ideas for the cattle on feed report were 94% total, 92%-102% placements and 96% marketing’s, and remember the report is a month old when it comes out. Feeder cattle have taken a header falling $8 last week.
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