Home News Feed Seed Consultants 7/12/2013 Weekly Comment with Gary Wilhelmi

Seed Consultants 7/12/2013 Weekly Comment with Gary Wilhelmi


Stocks pushed to new highs following Chairman Bernanke’s accommodative comments, in his press conference after the release of the minutes from the last FOMC meeting, which found the Fed governors split on QE tapering. We can’ argue with the persistent bull market bias in the stocks, as every economic warning has been dismissed.
At weeks end J P Morgan and Wells Fargo reported positive earnings, and next week we have Goldman and Citigroup. About these major banks, they are much more than banks as they are widely diversified. There is talk in congress about breaking up the mega banks, but they have been smart for them.
The PPI rose .8% signaling a stirring of inflation. The prime cause of the advance was gas prices and they may go 30-60 cents higher. The talking heads say people will just except higher gas prices, I hope, we are not that dumb, as our domestic supplies should preclude such a spike in gas. WTI crude hit $107 and was $105.61 Friday morning with Brent crude about $3 higher, when the spread was $20.
As the dollar index corrects down to 83 from an early week high at 84.75, the gold market rallies to $1274. Claim jumpers used to be, rightfully shot, and that’s what it is like in the speculatively controlled gold market.
The monthly S/D report was as expected, save wheat exports that were raised by 100 million bushels, and domestic usage was helped by feeding. Crop yields at this point are seen higher in corn and a little lower in beans, due to late plantings. The survey estimate will be done as of 8-1 and the report on 8-12. S/D reports are a monthly mandate, and are just guess work.
Summer weather has turned to the norm as hot times are noted in the Western Corn Belt, but conditions over all are 68% good to excellent in both corn and soybeans. Climatic ideas for next week are mixed.
November soybeans took a run at $13.00 late last week, and as the close is the only price that counts. Speculative computer players will press the buy button if beans exceed $13.00.
China confirmed on a rumored 960,000 ton corn purchase for 13/14. The Chinese have also recently priced 1.37 MT of wheat. They are historically good traders.
Corn pollination is over 50% done. A rough estimate of corn production is about 14 billion bushels, or plenty, and 3.4 billion beans.
Even in the calmest of times it is financially hazardous to trade expiring contracts. That’s one of the first lessons I learned when I started at the CBOT in 1964.
Cash cattle were called steady at best Friday morning. Boxed beef has slumped to $192.72 from $211. Pork trade has receded, and exports are 43% below a year ago. Some of the army of the ignorant says that if China buys Smithfield they will infringe on our export sales. Well, for one thing they eat all their pork, and secondly we don’t export that much. The infringement that concerns me, is that their take over would be the largest such venture on our shores, and it won’t be the last. The Chinese are sneaky, but they are smart, and they are our bankers.