Financial
2Q earnings begin with a soft attitude and even more never anticipation on advanced guidance
EU finance ministers meet again with no results expected
Spanish interest rates climb above 7% which amounts to a monetary cliff
Here at home we wait and worry about dropping over a fiscal cliff as tax cuts expire and debt rumbles on.
Dow off about 60 points most of the day
S&P 500 near 1350 support level wire to wire
Crude oil up $1.20 to $85.77
Chinese CPI at 2.2% is in a stall and Japan’s machinery orders were poor
Gold languishes at $1588
Dollar slides 23 to 83.14 but still near its export choking high
Euro at 2 year low
Livestock
Feeder cattle continue their power dive as corn surges ahead
Boxed beef off $1.78 at $190.87
Tighter supplies expected next year take April of 2013 to new highs
Pork cutout came into the week off $.51 with loins down $.78
This will be a normal slaughter week
Watch slaughter weights as it is still toasty in the plains
As feed costs sky rocket I don’t think has any idea on what $170 plus per head losses mean to the meat counter
Grain and soybeans
Corn last week was 48% good to excellent down for 56% the previous week and 69% last year
Soybeans 45% versus 53%, and 66% a year ago.
Watch the conditions report tomorrow morning
Current yield estimates are around 150 bpa in corn and 42 in beans
Soybeans still have a little time to improve but that requires moisture and none is forecast
This is the worst drought since 1988 and maybe back to the 1930’s, but that would take many years of consecutive dryness.
Some see El Nino relief in late 2012 or early 2013
Corn yield could fall to 140 bpa and after today’s explosive session it is impossible to calculate how high is high.
Reduced feed usage, decreased ethanol production and diminished exports will help shape rationing
The WASDE S/D report will be out on the 12th
There will not be a survey crop estimate for a month
10:48AM
S&P 500 drops under 1350, which was resistance on the way up
Dow off 60 at 12,710 with support at 12,600, although not major
Gold up $9 and crude up $.87
Corn, wheat and beans cruise at high altitudes
Japanese corn buyers not covered for 4th qt.
Black sea port shut down by flooding
Meats beat quiet retreat
Financial
2Q earnings begin with mixed expectations
The shadow of last Friday’s poor jobs report is still cast
Euro is at 2 year low
EU Finance Minister’s meet again with little expectations
Spanish 10 year yield back up over 7%, which is unsustainable
Euro actions short term at best
Chinese CPI 2.2% equals economic slowing
DAX steady to start
US consumer credit may be $9.5b up from $6.5b in April
US 10 year down to 5.2%
Unemployment benefits top $14 b
Crude oil $84.79 up $ .34
Gold $1586 $4 better
Dollar 83.18 down 19
Dow called a little lower
Livestock
Cash cattle $117 up $1 but remains at a large discount to futures
Boxed beef $192.50 on choice
Better eating weather in Midwest but plains remain fried
Pork cutout off $.51 with loin’s down $ .78 and hams up $.40
Short slaughter week
Grain and soybeans
The hot air balloon rises $.32 in December corn to $7.25, $ .40 in November beans to $15.46 and September wheat up $ .23 at $8.29
40% of corn is affected by drought
Temps moderate back into the 80’s but it looks dry out through 10 days
Delta may get ¾-1 ½ of rain
150 bpa corn yield seen by many down from beginning 162 bpa
Soybeans till have some time to recover over $15 Nov. does not show optimism
Dollar at 83.18 is awfully rich and that limits all exports