Home Market Market Watch Seed Consultants Market Watch Weekly Comment with Gary Wilhelmi 12/28/2012

Seed Consultants Market Watch Weekly Comment with Gary Wilhelmi 12/28/2012


In my forty-nine years in the analysis and explanation business I have never witnessed such a dysfunctional abandonment of public trust as we have had in the last few years. We only skim along the surface of deep seated long term problems, at best, and now we can’t even do that. It is a sad commentary on prospects for those who follow, or our children.
The grains dropped below support levels at $7.00 in March corn and $7.75 in March wheat with the next shelves at $6.50 and $7.62. March soybeans have held above $14, but export sales wilted to 87,000 tons. Wheat business was good at 1 MT with Egypt buying 405,000 tons. Corn abysmal once again near 100,000 tons.
A major winter storm traversed the southland creating short term logistical troubles, but river levels remain critically low south of St Louis to Memphis. Even if we have heavy snow winter soil moisture will not be fully charged and yields could still be reduced in 2013. It is, of course far too early to make such assumptions, but it must be kept in your memory bank.
China is fully engaged in a normal switch to South American soybean supplies and prospects look good in Brazil with Argentina continuing to fight excess rain delayed plantings. China will not completely shut off the US demand switch. The Chinese economy has been troubled, but not so much as too severely impact food demand.
The volume of trade is reduced in all markets and that serves to enhance volatility. The CME is facing the ICE buying the NYSE creating a powerful derivative competition. The price of CME stock has fallen 15 % as the NYSE has had a similar advance.
Over in the meat isle holiday specials dominate, and 2013 economic concerns cast a long shadow. This week cash cattle started at $127.50 up north which is short of parity. Slaughter levels are holiday interrupted this week and next. Boxed beef has held near $194 on choice and pork cutout has reflected a limited specialized demand. Beef export sales were down 15% last week at 11,000 tons.
Our inability to pass a new farm bill, it has never been sent to the house floor and now we face perhaps a $2-3 jump in milk prices and uncertainty regarding farm programs. Where has all the common sense gone?