Home Market Market Watch Seed Consultants 6/7/2013 Weekly Market Comment with Gary Wilhelmi

Seed Consultants 6/7/2013 Weekly Market Comment with Gary Wilhelmi


Unemployment rises slightly to 7.6%, but jobs reach 175,000, while wage growth stagnates. Former Fed Chair Greenspan says to begin Fed taper now, even if economy is not ready. Following that comment, the Dow went from 68 higher to 147 points better. Tapering has been a central theme in market reaction of late. Before this rally the Dow had been down about 5% for the week. A normal correction is 10-20%, and anything greater is the beginning of a bearish trend. The dominating computer trade jumped in and bought this modest dip.
Asian and European economies remained troubled. Some major trade sources suggest shorting the Japanese yen, while buying their stocks. The ECB left its rates unchanged and made no elaborate recovery claims.
Crude oil is in mid range, but the pump is primed by refinery shutdowns and local gas is $4.29. Gold has been hanging around $1400, obviously not stimulated by international economic concerns for now. The dollar index has fallen to 81.50 and the dollar yen to under 100. Weakness in the greenback has not, however, sparked export trade for the
November soybeans spiked to challenge resistance at $13.25 early Friday, with $13.40 the next level on the weekly chart. Soggy condition raise concerns about bean yield and quality. Corn is about 95% planted, but there are worries about replanting and usage of the prevent plant alternative. Spring wheat has had unusual moisture, at 80% done, and in reaction spring wheat was 8 cents higher early Friday. A drier period is forecast for next week in the western Corn Belt. but the east may be wetter with normal temperatures. The east is largely planted so rain is not a general concern.
The USDA soybean crush estimate is thought to be light and soy meal has reached its high point at $455 with $460 the high on longer term charts. Brazilian corn estimate rose to 78.5 MT up 2.5 Mt from the USDA estimate. Tyson is said to be buying Brazilian corn due to tight US supplies of old crop. US stocks projections are 1.650,000 billion bushels of corn up from under 700 million, 296,000 m million beans from 125 and wheat 607 million or adequate with general global increases. EU wheat production is up 4% and Russia at 58-59 MT. Egypt has money problems relating to their government chaos, and is seeking financing from France.
Cash cattle were not set early Friday with a $123 expected, or down $1 expectation. Choice beef has tumbled from $211 to $203. In part, stimulated by the hog virus, July futures broke out to set up a test of the $98-99 level on the charts. Beef margins are fat. Pork trade has been of light volume. Hog slaughter was lighter due to the virus factor, and reduced export interest. Static wages have hurt meat demand, which remains concentrated in the cheaper cuts. The SEC alleged insider trading in the Smithfield China deal involving a Thai trader.