Gary Wilhelmi Weekly Column

Corn plantings roar ahead with a promising weekend behind us.  We should make substantial progress in the next update.  Western Corn Beltis off the pace but recent rains spruced up conditions.  Winter dryness may yet be a left over factor in northern belt.

Soybeans need to attract another 1-1.5 million acres and the bean corn ratio is favorable for that, but the weather is the driving influence.  Brazilian bean prospects continue to shrink but the damage is mostly done and in the market at $14 per bushel plus.  There are $15-16 bulls around but lean into market strength in your advance marketing’s.  Wheat ratings up to 64% good to excellent on HRW crop and spring wheat plantings are at 37% versus a 10% average.  Conditions inEuropehave also improved.  Japan, has cut off European corn buying for now due to quality problems and that’s good for us.  Rumors of Chinese interest inUScorn circulated last week and they continue to price old and new beans.  Watch Chinese economic reports as their attempts to rein in inflation have cut back growth.  Signs of speculative excess appeared late last week.  Volatility has been common over the last few years, but don’t be confused by the hype.  Immediate over head resistance in May soybeans is at $14.50.  May corn and wheat bounced off $6.00 support.  December corn support is at $5.23-25.

Boxed beef ran up $7 in three days as cattle production declined and consumers became more aggressive.  Cash cattle, however, dropped $1 inTexasto $120.  Beef exports at 20, 700 tons were not motivational.   The cattle on feed report Friday is expected to show larger total numbers but lighter placements and marketing’s.  Remember, those reports are a month old when they come out.  Hogs have been hammered into an over sold condition, as funds plied on short speculative positions.  Pork margins just dive deeper into the red.  Weekend features favored beef, but there was a good mix of offerings.

On Thursday,Spain’s bond auction went better, but non performing loans have risen to 7% overall inEuropeand 8-9% in troubledSpainandItaly.  Even with the more constructive auction results the German DAX index was dead in the water.  Spainwill likely need a bail out, but such funds inEuropeare getting scarce.  Chinacontinues as a haunting presence economically and they are the lynch pin.  Here at home our economic reports are mixed or symptomatic of a stodgy recovery as evidenced by a limited jobs growth.

The CME will introduce Black Seawheat futures June 6th, offering some interesting spread opportunities.

French first round of elections on the 22nd.  The results and ramifications for the fragile EU are quite important.

The IMF and G20 meet inWashingtonthis weekend but it is usually just idle chatter.

Recommended Posts