Home Market Market Watch Gary Wilhelmi 5/9/2012 PM Comment

Gary Wilhelmi 5/9/2012 PM Comment

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Financial
Late sinking spell leaves Dow 97 lower
The shadow of European despair is cast heavily on all markets and the result is risk aversion
Turn first to the European markets tomorrow morning

Livestock
Cattle have dropped from $129 to a low of $112
Hogs from $100 to $ 83
Short covering was short lived today
Cash cattle heading for an eleventh hour conclusion Friday
Pork demand struggling as is beef as wallets are barren

Grain and soybeans
S/D at 7:30 Thursday morning with tight stocks in beans, old corn and relief coming in large wheat, corn and probably not enough in beans
Bean plantings expected to pick up by 700,000 and another 600,000 corn
Beans have fallen about 80 cents in this much needed correction.
Weather is excellent
Empty bins have driven corn basis higher
Volume lighter in all markets due largely to risk aversion

 

1:53 update

Short covering has been a feature in financial, livestock and the soybean market
Corn and wheat held near their lows
DAX covered up to a .4% advance up from a minus 1% loss
Boxed beef up $.31 is meaningless
S/D Thursday at 7:30
Volatility is just around every corner
Risk aversion has become a byword.

 

10:17 update

Dow holds down 132
Dollar up 43 at 80.17 with high in last year of 81.78 is up 7.3% for the year
No new bean exports for first time in 8 days
Winter wheat survey estimate tomorrow
Discount to cash is a plus for nearby cattle
Cash hogs called steady to lower on poor demand

10:03 update

Dow opens down 130 points
Morgan Stanley off 1.9% on pending down grade of stock
Dow support at 12,700 and now at 12,801

Financial
Nikkei off 1.5%, DAX down .4%, FTSE 1.2% lower and Dow early minus 65
Greek political turmoil and inability to pay interest on debt punishes finance
Dollar up 42 at 80.15, the highest in some time (We are not doing well but better than Europe)
Inventory report expected up .6% from +.9% last month
Crude off $.55 at $96.46, some analysts see significant fall as energy prices plunge in deflationary spiral
Gold bugs continue to head for the exits down $20 at $1584

Livestock
Cash cattle may trade better but bids are now at $117 with offers at $122-125
Boxed beef not showing positive leadership
Lots out of balance with reduced occupancy
Kill average at 126,000 and also in hogs at 415,000
Pork cutout up $.45 but demand is poor
Features mixed with Chicken drumsticks at $.78, Country ribs $1.38, 73% ground beef $2.79 (expensive), Center cut chops at $2.29 and select New York strip steak at $6.99

Grain and soybeans
Mixed signals seen in S/D report
New crop corns carry at 1.7b with beans at 165m (Ultra tight)
Liquidation rages in beans off another 14 over night at $14.23 July (75 cent break is no surprise)
Maybe 700,000 more bean plantings and 600,000 of corn
Weather is dandy
CRB index falls sharply with other markets
Feed and ethanol demand contracting
December corn resistance at $5.35-40 and some suggest buying puts at that level (hedge)
Empty bins drive corn basis higher
Risk aversion noted in all markets