Home Market Market Watch Gary Wilhelmi Weekly Column 4/27/2012

Gary Wilhelmi Weekly Column 4/27/2012


Choppy week in grains and especially oil seeds, as the markets approach or set new highs.  The soybeans are chuck full of excessive long speculative positions.  The South American crop losses are coming into clearer focus.  Argentine soybeans are now set at 43 MT after starting the year with hopes of 61 MT. Brazil, likewise has dropped back into the high 50’s from a 70 MT plus target.  At the moment the Argentine corn harvest stands at 41% complete and soybeans at 56%.  China continues to be the main demand attraction; with shadows of a slowing economy are risks to the trade.  Another measure of S. American production pegs beans at 116 MT total versus 119.5 MT expected.

The planters are rolling through the fields like the Germans roaring through Poland.  Iowa was lagging but big catch up week will be reported on Monday.   Hard freezes were realized in north west Indiana and Michigan, but the normal frost free date is 5-15, it is just that we got spoiled by warm March madness.

Wheat prospects remain good in this country and next week is the annual Kansas wheat tour.  Dryness has become an issue in Ukraine, Russia and Kazakhstan.  Weekly exports were the best in some time in wheat and soybeans, led by China were outstanding.  Corn exports were on the light side but S/D updates are expected to raise corn report projections.  Tightness is still a feature in old crop corn and soybeans.  New supplies could be bountiful in corn but beans will remain a squeaker.

Fresh export business was announced of 1.44 MT of corn to unknown for 12/13 and 120,000 tons of corn to China for 11/12.  Also, 116,000 beans to unknown for 12/13 and 110,000 to China for this year.

Cattle suffered from unnecessary roughness again this week in the form of an isolated mad cow occurrence.  Just a few months ago it was the hyper sensationalized slime fiasco.  No matter, the stories were trumped up by the anti meat freaks, but the cattle market has taken a beating.  Southern cash traded at $119 off $3 last week.  Boxed beef have advanced, but consumer demand is still quite picky for obvious economic reasons.  Pork demand has contracted due to China’s business slowdown and budget adjustments.

The European economic boogieman is still lurking in the wings.  The Dutch governments caved in and keep your eye on Spain and Italy as conditions worsen.  US GDP contracted to 2.2% growth from 3%.  Earnings have been good as most S&P 500 stocks have now reported for the first quarter.   It is a good time to get on your blinders as the political silly season gets into full gallop.