Home Indiana Agriculture News Seed Consultants 3/15/2013 Weekly Comment with Gary Wilhemy

Seed Consultants 3/15/2013 Weekly Comment with Gary Wilhemy

SHARE

The professionally preferred S&P 500 index crept up at its all tine high of 1565, like a cat burglar. Such a pattern is positive in that it is not excessively volatile, while also signaling rally exhaustion. The S&P is up 9.6% for the year. The Dow ran up ten straight days coming into Friday and the NASDAQ also got a gold star. The 10 year note printed a 2.05% rate up from 1.4% last July or 30%, and that’s important. The investment trend is out of low yielding bonds and into higher yielding equities. Note that in your retirement strategy. WTI crude trashed around in the low $90’s and some analysts see WTI falling to $75, as more shale production comes to market. The gold bugs crawled back into the wall waiting on the next global scary event. The dollar index challenged 83 before slipping back on profit taking to 82.17 early Friday.
The strong dollar and some see it going to 89, handcuffs exports. To evaluate that dollar effects watch the weekly sales, and more importantly their pattern, as just one week can be deceptive. Wheat had a good report at nearly 1 MT, due to cheaper prices, but then it rallied 30 cents last week. Tight old crop corn supplies hamper current exports. Soybean demand out of China slowed, and China cancelled some Brazilian purchases due to their 50 day delay in shipments, but did not show up on their US shopping list. Labor and the Brazilian government are talking trying to get beans moving as harvest is over one-half done. The Mato Grosso, in the northwest which ships to the Amazon is 75% complete.
US HRW wheat has gotten some moisture relief but Kansa is rated just 27% good to excellent. SRW wheat in the Ohio River Valley is benefiting from recent rains. The Midwest has had a bit of relief, but it would take an abnormally wet spring to catch fro the drought. Spring weather is anybodies guess, so don’t be confused by crackpot predictions.
The acreage report at month’s end is expected to be bearish, approaching record amounts. Nature is, of course, the final arbiter. There will also be a quarterly stocks report will measures domestic usage. Ethanol production is down 11%. Alternative sources are being employed to produce ethanol as our purchase of 400,000 tons of sugar indicates.
Boxed beef is at all time highs with choice at $197.47. Cash cattle were slow to develop and Friday morning packer bids of $127 were being passed with owners holding out for $129. A 600,000 slaughter week is possible. Hogs early Friday got hammered down to $80.25, or right on support. Pork demand is obviously punk. I have heard cook out talk, but it is too early to clean up the grill. Beef export sales rose to 31,500 tons, but watch the trend. China hog kill has literally spilled into the rivers and that is a sign of their over all impaired demand, due in part to additive issues. Also depressing the hogs are the Russian meat ban and the strength of the Japanese yen.