No big European events scheduled this weekend, but Spanish banks are seeking further bail outs, which have not worked in the past. The Belgium Deputy Prime Minister said that the EU leaders must prepare for the Greeks exit for the Union. This past week the euro fell below support at 1.26, the dollar index breached its 82 resistance point, crude oil had a brush with $90 and gold surged back and forth like a golden jumping bean.
Speculative density in all markets makes for an irrational back drop. July corn fell seventy cents after rising on Chinese purchase rumors; the going down on indications of Chinese buying delayed until September and then pounded down by rumors of Chinese corn cancellations. The Grimm brothers would be proud to concoct such fairy tales. That’s the trading reality today computer driven volatility.
Watch the Palmer drought Index, an old 1960’s device which gives you a reading on dryness. Focus on the Midwest, where conditions are currently just moderately dry. The month of June will compose the next crop development tune. Also watch Texas wheat quality and then follow harvest reports north.
If the weather cooperates Brazil could produce the 77 MT soybean crops next year, that adverse condition deprived them of this year.
Current corn condition ratings rare 77% good to excellent, spring wheat 74%, but Kansas HRW ratings have declined from72% in April to 46% today.
Purchasing managers indexes have fallen in Europe, the US and China. Deflationary concerns have increased and that depresses values, and you should watch gold in that regard and crude oil.
The low light of this past week in the meats was a vey bearish cold storage report that had beef in the cooler up 17% on the year and pork up 20% There your soft meat demand in action. Cattle were trading at $121 Friday steady, with Nebraska beef up $2. Boxed beef added $3 and choice beef premiums widened to $8, a sign of cook out features. Pork is skimming across the lows. After Memorial Day summer demand takes over and historically top meat cuts are secondary. Memorial Day weather looks good for cookouts and that along with Mother’s Day are the leading weekends for steak featuring, for Dad’s day it is hamburger.