Don’t believe any news source as they tend to be politically tainted, take the time to look at both sides of a story. I do not care what anybody thinks about markets, I am more interested in why they think that way. One of the first things I was taught on the trading floor was to always consider where opinions were coming from or, usually out of their position, or prejudiced. Every day I heard rumors and most of them were BS.
Early Friday the Dow went over 14,000 for the first time since 10-17-07. The employment report was not that good. New jobs at 157,000, is not meaningful progress and unemployment rose to 7.9%. The ISM manufacturing index climbed to 53.1 from 50.7. Exxon earnings beat the street estimates. The beginning of a month is always packed with new data. Unfortunately, those reports have had their formulas so polluted over the years that we are not comparing apples with apples. So often, economic reports are a fruitcake.
The dollar index fell below 79 with support at 78. WTI crude oil was near $98 and Brent crude has consistently risen since going over $113, now at better than $116. Gold has been churning about in the high $1600 range, and watch $1700 resistance. US stocks are bloated and risky, being driven by computer gunslingers; the fast draw has become a key trading asset. That, of course also applies to Ag futures.
Dryness in Argentina has received some scattered relief, and S Brazil is likewise dry, but Brazil over all is in 82-85 MT target soybean range. Watch private crop estimates on S America, for benchmarks. US prospects are uncertain as our drought conditions have not been mitigated. Some forecaster’s see a wetter Eastern Corn belt developing, but it is too early. Snow in the upper Midwest will add some water to our depleted rivers, but we need a lot more. Low water on the Mississippi causes us export business. China continues to an aggressive buyer of soybeans on into 13-14, and Chinese New Year beginning on 2-9 spurs immediate interest.
Technically, the markets are bracketed by $7.35-7.50 in March corn, $14-15 in March soybeans’ and $7.40-8.10 March wheat. Volume of trade has been light, but still choppy, don’t take anything for granted.
In cattle Texas and Kansas cash was traded at $125 up $3, but Nebraska was slow to develop. Boxed beef has dropped several dollars in the last few weeks. The inventory report average estimate was 1.8% lower than a year ago, and at a 1952 low. Replacement demand was forecast to be below a year ago at 99.2%. Feedlots of less than 1000 head have been closing, so watch that update. Market ready hogs have tightened. Cold and snow has disturbed the normal of hog movement. Pork cuts have been mixed and the front page of the local meat features dominated by cheap ham shanks and the lowest quality of ground beef.
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