Gary Wilhelmi Weekly Column 5/4/2012

Just 115,000 jobs added to the rolls, so stocks opened a 120 lower on the Industrial Friday morning. Crude was down nearly $5, below $100 per barrel. Gold back slid to $1639.
European markets receded following a dip in the Euro zone purchasing managers index to 46.7 from 49.1. Watch the French and Greek elections. Consumers must lead the US economy which is threatening to go into a spring stall. Stay tuned for skeletons which may jump out of the closet at any time.

At the conclusion of European trade the DAX and FTSE were off 2%, and the deeply troubled Spanish stocks down 4%. Yep! The skeleton jumped out of the closet. Dow at mid day was down 160 points, the S&P had dropped to 1377 and NASDAQ under 3000.
*** Important support on the S&P 500 at 1370 with the next spot 1340 and as the Ag markets were closing the S&P was at 1370.

China remains a major buyer of US soybeans 1.7 MT in last week’s total export sales with almost one half of that to China. Corn sales were again huge at 3.47 MT, but that did not come as a big surprise and the market fizzled. US wheat sales are not good enough to advance the needle. Kansas wheat tour finds great potential, but state could use some rain. The dry areas of the Ukraine and Russia may get rain over the weekend so check that out.

CME expansion of trading hours has been delayed until May 21st for reason of paperwork. One of the results is likely to be increased volatility, especially considering the fact that the markets will be trading during the release of government reports. Producers should take the long view of the markets, regarding time, and forget about the speculative noise.

Wal mart, our largest food retailer is too offer choice cut beef features this summer. This helped motivate the cattle to rally Thursday, but also remember the market was heavily over sold and short covering was a major contributor. Hogs followed the rally but faded late in the session, as demand is just not that good. Something that caught my eye was that there was no cook out cuts featured in this weekend specials. It is pretty good eating weather, but budgetary considerations won out.

Beef went through the whole week without any new meat scares. The BSE and slime stories only made for good bologna. Beef exports are up 4.5% for the year and pork sales remain the leader of the pack in hog trade. Hogs, however, are on their lows and cattle are fishing just off the bottom.

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