Home Indiana Agriculture News Seed Consultants 4/12/2013 Weekly Comment with Gary Wilhelmi

Seed Consultants 4/12/2013 Weekly Comment with Gary Wilhelmi


The mechanical bulls were defending their large long positions in US stocks early Friday despite the worst retail sales off .4% in nine months and a University of Michigan consumer sentiment measure at 72.3 versus 78.5 expected. European stocks were lower on new Cyprus confusion. Austerity has not worked, and really never has. The sick list of EU economies continues to grow plus some relapses like in Portugal and Ireland. US bank stock profits set records, but the group slumped early Friday.
The Fed policy make up is mixed within Fed governors, and indeed it is a tough call, as too when to ease off easing. Bond buying may decline in the months ahead, but the end of the year is uncertain. The Presidents budget must be graded incomplete, as it adheres too much to political considerations. North Korean aggression threats must be taken seriously as their young and inexperienced leadership is literally loose cannon, marching to a tune orchestrated by the military. All this is interesting to follow, but or so aggravating.
The rains have come in voluminous amounts in the Midwest and south, but continued showers are needed to maximize crop production. The next ten days look soggy. The bull spreads have been the feature in trade occupying 65 % of volume. Tight old crop corn supplies versus improved new crop prospects, and Brazilian port delays are flaring up again putting the accent of near by soybeans. Talk of planting delays and diversion of acres into soybeans from corn is premature. At the end of this last week grains and soybeans are in middling ground range wise. China bought 14-16 MT cargoes of HRW and may by more but that has only assisted in minor short covering. Global supplies of wheat were raised 4 MT in the S/D update. Margin rates were properly raised on the volatile spreads in grains and soybeans. Watch the CFTC report Friday for hints of fund activity.
June cattle grazed their $ 120 support level. Boxed beef fell over $3 on select cuts. Middle meats are the spotlight items in beef features. Seasonally pork demand tends to rise into summer, but current interest is slack. Red meat export trade is in a slump on both products, with pork off 14 % versus a year ago. Bird flu in China has been contained thus far, but has a threatening history.
Gold beats a hard and fast retreat off $63 early in part due to tame US inflation indicators and WTI crude oil fell $2.75 on punk demand. Dow at 10:30 AM was off over 40 points. Not long ago gold was over $1600 and now $1500, with crude oil near $100 per barrel and presently about $90. Gold was $1800 last October, and has a history of drastic changes in value.
The May versus November soybean spread has widened 40 cents this month and in corn 10 cents.
At the close, amidst all the turmoil, the Dow closed unchanged as the gold dropped $77 and WTI crude $2.42. The Ag markets did not alter their day long alignment.