Home Market Market Watch Seed Consultants 6/28/2013 Market Watch Week Commentary with Gary Wilhelmi

Seed Consultants 6/28/2013 Market Watch Week Commentary with Gary Wilhelmi


Split opinion within the Fed, regarding the timing of tapering, creates a nervous market environment. S&P in sensitive spot with resistance at 1687 as it was just over 1600 early Friday. Consumer sentiment set back to 84.1 from 84.5. Gold drops below $1200 or $600 off the high off the high. Bearish extremists say gold could fall to $800, but there are always extremists. The root cause is something we have limited experience dealing with and that’s deflation. Now we sail into July and another new job measure, but of more importance in reading the tone of employment is the weekly jobless claims report, which comes out on Thursday’s. We have been talking about the dark business clouds gathering over China for some time and now they are beginning to rumble.
Jumping interest rates have pinched the already restricted course of business. 10 year notes at 2.54 % up from 1.71 % and that equals over 40%, thus the pinch.
On the good side, stocks have pushed higher despite the sequester, higher taxes and multiple foreign failings. I can not listen to those happy talk clowns on TV, having been in television for over thirty years; I know good news drives advertising spending, but objective analysis is fair and balanced.
The grain and soybeans markets were going into the acreage and stocks reports on or near their lows. I have been taught that how markets go into reports is just as important as what they say. The meats are the polar opposite at their highs, so buckle your safety belt, or better yet don’t trade. The speculatively polluted atmosphere of the commodities and stocks markets is dangerous and casino like. Remember, I have spent a career as a spokesman for the commodity exchanges, but I realize the present danger, and know real analysis is best made from a distant view. After the acreage report the key issue becomes yields, and right now prospects look good on a national basis. There are always troubled areas, last year it was too dry and this too wet in spots, but I look at the national and international situation. Wheat was below support in the September contract because the Black seas area is production large competitive crops. The focal points of the Stocks in all position report will be soybean crush and ethanol usage of corn.
Hog virus has propelled the market to these highs and also caused Mexico to limit importation. Pork cuts are at record high. which gives beef an advantage. Boxed beef has fallen to $197 on choice from a recent high of $211. August cattle resistance is at $123.50 and August hogs were near $ 100, so some rendering is possible. The Pig crop is not as wild and crazy as it was in the days when hogs were raised, out back of the barn, and expectations are for 100-100.5% in all categories.
Dec corn falls 25 cents after bearish acreage report finding 97.3 m planted versus 95.3 expected, and that’s is compounded but 25% yield improvement from a year ago. Support under Dec corn on the monthly chart is down around $4.60. Soybeans report more neutral but Nov beans were down to $12.59 recently, with support at $12.50 and then $12.20. September wheat drops to $6.59 and that is below all major chart points.