Home Indiana Agriculture News Seed Consultants 5/31/2013 Weekly Maket Comment with Gary Wilhelmi

Seed Consultants 5/31/2013 Weekly Maket Comment with Gary Wilhelmi


May has been a positive equity trading month, but it’s stuttering at the end. Obviously, our economic signals have become mixed. On Friday, consumer sentiment at 84.5 beat the estimate at 83.7, but consumer spending fell .2% to a one year low. 1Q GDP contracted to 2.4% and not much better is foreseen. Next Friday we will have the monthly employment report and any over 200,000 new jobs would be encouraging. If left along our economy will gradually improve, but the environment has changed. Many fall back jobs, like working at a gas station have disappeared, as that has been the case for many manufacturing positions. If a job does not make anything, it does not pay as much.
China’s economy has been undergoing growing pain reductions for months. Europe holds lots of conferences but accomplishes little.
Goldman Sachs reaffirmed its judgment that the bond market is taking at beating. 10 year note rates have risen 22% in the last few months. The interest rate sensitive Utility average has lost nearly 10%.
The equity markets are drunk with computer speculation. Money has been moving out of commodities into stocks, which is a hyper example of a historical trend. I have been through many such gyrations in my fifty years on LaSalle Street.
OPEC has ebbed as US oil production ramps up, as it should have back in 1973. WTI crude oil fell below $93, in a range of $90-100.
Weather has done a 180 degree turn from bone dry to soaked, in all but the Western Corn Belt and the fringe of the plains. The rough estimate is that 2-3 million acres of corn will be replanted to shorter maturity seed, or switched to soybeans. Yield potentials are good. June and July will be the maker months in corn. We will not have a survey crop estimate until August and it could be a bumpy ride.
GMO unapproved issues regarding Oregon wheat have caused Japan and South Korea to require more testing, but the market impact has been slight as Oregon wheat is just a fraction of a fraction of our production.. Japan has dominated the PNW wheat for decades.
Weekly export sales were fair with China buying some of each.
The Mississippi River is currently closed in some areas due to flooding, whereas a few months ago it was too low.
Lead contract cattle and hogs firmed a bit near weeks end. Cash cattle, were reluctant to trade and expectations were for steady at $124-125. Choice beef pulled back slightly from record highs, but at the meat counter, consumer budgets can not endure such high prices. Pork showed a bit of upside momentum, but there were not many offerings of pork in the weekly features. The buying of the troubled pork operation of Smithfield by the Chinese may mean more pork exports, but current levels are minute. Weekly export sales totaled 19,000 tons of beef and 15,000 tons pork.