Home Indiana Agriculture News Seed Consultants 3/29/2013 Weekly Market Comment with Gary Wilhelmi

Seed Consultants 3/29/2013 Weekly Market Comment with Gary Wilhelmi


After weeks of trying the S&P 500 index finally closed over its 1565 all time high. In the first, quarter the S&P was up 11% and the Dow and NASDAQ over 10% higher. If only Congress and the White House could discuss without damage like the markets do, we would not be in such a fix.
Cyprus, under armed guard is functioning with their banks allowing depositors to withdraw cash on a 300 euro rationed basis. The IMF has approved the Cyprus policy of looting depositors of 40% of their money and that is now a precedent for the rest of struggling Europe. The next nation into the barrel could well be Slovenia. Several others are on the endangered nations list. US banks, in better shape, will benefit from fleeing cash withdrawals.
US GDP was paltry at a .4% annual growth rate. Consumer spending was higher in February. Jobless claims rose to 357,000 and anything over 350,000 is negative.
This long Easter weekend may be like going for a walk in a mine field, from an investment standpoint. The risk reward ratio is weighed heavily to the bearish side at these all time highs. Corrective action could mean a 5-10% decline on the indices. Ten year notes have fallen to 1.85%, but are still at a 30% increase from last July’s low. Fed opinions are mixed regarding the bond buying program. The unwinding of that procedure will increase sensitivity in all markets. Just in case, batten down the hatches.
Quarterly stocks reports are notorious for springing surprises and it happened again as corn stocks were 5.4 billion bushels versus 5 billion expected and soybean 999 million against 947 million. May corn goes limit down, soybeans near fifty lower and wheat was like beans. Wheat stocks were 3% greater than a year ago and global supplies, we already knew are ample. Plantings were as expected at 97.3 million cares of corn, a little smaller at 77 million soybeans and a touch larger at 56.4 million acres of wheat.
Now comes the important part, what can we produce off of these acres, or spring weather realties, which no one knows for sure. Remember two-thirds of the Corn Belt continues to have dryness issues.
After Thursday’s massacre, the charts look scary to the downside, but remember the drought factor, so be prepared for some equally spectacular runs to the upside, on dusty concerns. The one thing we can count on is volatility in these speculatively polluted markets.
June cattle surmounted chart resistance at $124 as cash cattle jumped $1-2. Boxed beef had a tough week off over $3. June hogs finished at mid range at $91.20. The hog and pig report showed all numbers at 101% of a year ago, breeding inventory just slightly above 100% and marketing’s 102%. Hogs remain close to their low. Meat demand has been restricted by higher payroll and other taxes. Spring like temperatures are arriving so maybe the grills will get fired up.