Home Market Market Watch Seed Consultants Market Watch 2/15/2013 Weekly Column With Gary Wilhelmi

Seed Consultants Market Watch 2/15/2013 Weekly Column With Gary Wilhelmi


US stock indices held near their tops, while European equities slide down on weak GDP reports. 4Q US GDP off .1% was not too hot, but it was better than European results. The dollar, therefore, gained ground on competitive currencies, at 80.53 Friday morning with resistance at 82.
The State of the Union address did nothing to provide leadership and offered only politically taunted vague proposals. The sequester kick in is just two weeks away and all we hear is political carping. Rather then coming together in a compromise, forming a decision, the extremes have been digging in and widening the gap and you and I are left in the middle.
Grain and soybean markets ground down to test support levels at $6.90 on March corn, $14.00 March soybeans and March wheat $7.00. There was a little, light volume short covering coming into Friday, but bullish motivation may be a few months away, that is if the prevailing drought continues. The Chicago area snow fall is 40% of the norm, and even less than last year. We have had heavy snow up north and better moisture is the east, but the vast middle and plains remain ultra dry. Under normal conditions it will take two to three years to recover from last year. A good established way to monitor the extent of dryness is by watching the Palmer Drought Index.
Conditions in South American, net out fine as any loss in Argentina is more than made up for in Brazil. Brazilian beans are 12% harvested versus 7% average. There have been over 80 ships waiting to load at Brazilian ports, but that is not unusual.
Chinese New Year will wrap up Sunday. 230,000 tons of soybean sales were cancelled Friday, but such readjustments are normal.
Cattle recovered some ground on short covering, out an extremely over sold condition. Cash cattle dropped $2 to $123. Boxed trade was mixed. The sequester activation would furlough meat inspectors, and that caused the mid week break to the lows in both cattle and hogs. April hogs support is at $84.02 so watch Friday’s close. The markets are over done on the downside, but hogs have been reluctant to bounce. Higher pay roll taxes are taking a bite out of disposable income and that shows up at the meat counter. Rising prices for gas also takes a chunk out of demand for meats etc.
Gold futures were pounded down to $1606 off $29 early Friday on positive manufacturing index and U of Michigan consumer confidence reports. The lead futures are bracketed by $1550 support and $1775 resistance.