Home Market Market Watch Seed Consultants Market Wrap Up 7/10/12 with Gary Wilhemi

Seed Consultants Market Wrap Up 7/10/12 with Gary Wilhemi

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Financial
Dow off 83, crude down $2 and gold $21 lower all wilted in the afternoon trade
The dollar is lurking just below its years high at 83.54 and that puts the kybosh on exports
EU Ministers threw more money at the Spanish banks but they are not dealing withy the root causes
UK Manufacturing index was helpful early but the under tow is strong
Wells Fargo and JP Morgan report earnings this week
In general, earnings are expected to be weak and advance guidance weaker

Livestock
Cattle trade is sluggish
Boxed beef $.27 lower select and $ .42 choice
Cattle drifted lower late
Hogs fell to a $1.65 nearby loss
Pork cutout was off $.26 with loins down $1.46
It is about BLT time but that is not showing up in bellies yet and depending on conditions tomatoes could be scarce

Grain and soybeans

The horror stories are coming in corn and are generally true
Corn rating and soybeans dropped to 40% good to excellent
Light profit taking was the market feature today
WASDE S/D report Thursday and corn and soybean carry over’s are expected to decline
If corn yield falls to 140 bpa carry over could be under 1b and beans could visit never ever land below 100m, but remember this is just a best guess and we will not have a survey crop estimate until a month from now.
Don’t go to sleep on the financial markets as they finished with downside momentum today
Some forecasters see El Nino rainfall relief in late 2012 into early 2013 but that’s a long shot
Palmer drought index indicates that we need 15” of rain to catch up, but it is too, late on some areas
Strong dollar limits reportable export sales of over 100,000 tons

11:44am ET

Dow off 29 and quiet
Crude off $1.00
Gold steady
Cattle show lists larger
Cattle open interest lower and trade sluggish
Beef demand turns to select grade
Boxed movement good at 203 loads
Hog discount of futures to cash is a plus
Pork cutout weakens as BLT season begins
WASDE Thursday expected to show lower corn and soybean carryouts
Palmer drought index indicates we need 15” of rain
This may be a multi year problem like in the 1930’s
Chinese bean imports are up 31% this year
Spring wheat ahead of schedule in development with slight cut in rating
Chinese wheat currently in decent shape while the Black Sea area suffers from dryness

 

Finance
EU ministers to throw 30b euro at Spanish banks
Spain’s 10 year rates fall to 6.83% from 7.06%
EU efforts are not a solution only another stalling tactic
Alcoa lead off earnings as expected
Wells Fargo and JP Morgan this week
Generally weaker earnings expected and bearish guidance
DAX up .9%
Crude oil $85.63 off $ .36
Gold $1598 up $5
Dollar up 12 at 83.36
UK manufacturing index tops forecast

Livestock
April cattle at new high as reduced placements are expected due to rising feed costs
Cash offers at $120
Feeder losses at $170 per head and rising
Choice boxed beef down $2 at $190.50
Pork cutout is $.26 lower with loins off $1 46 hams steady and ribs up $5
Normal slaughter week begins at 127,000 cattle and 393,000 hogs

Grain and soybeans
Illinois, Indiana, Ohio and Eastern Iowa near disaster relief status
Corn rating down 8% to 40% good to excellent with silking at 500% versus 19% last year
Soybeans 40% from 45% and blooming at 44% versus 25%
Absence of reportable export sales of 100,000 tons plus due to strong dollar
Corn yield could fall toward 140 bpa
Bean yield around 41 bpa seen
No survey of crops until August or about one month
WASDE S/D report on the 12th
Worst drought since 1988 and solar pattern resembles the dust bowl
Beans still have some time but forecast is for more of the same punishing weather



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