236,000 jobs added in February and unemployment is at 7.7%. Economists, generally feel that government finagling distorts the report 2% or more. The Dow hits another new high up 75 at the open and then fades by 9:00 AM CST. S&P hit 1551 or above resistance and NASDAQ went to a 12 year high. Equities were acting a bit fatigued and concerned about the approaching continuing resolution, delaying the debt day of reckoning. The equity markets have been in part driven by money coming out of commodities and low interest bonds. The Fed’s printing of money and aggressive government spending has been cracking the whip.
Chinese economic data has been mixed as they attempt to drive growth while restraining inflation. The dilemma for the Chinese is that their hybrid form of government has never had to deal with such issues, and they learned their economic techniques from us, and we are policy challenged.
Europe’s problems have been crowed off the front page, but are no closer to solution.
The sequester, is beginning to chew away at our economy and military, and as AG secretary Vilsack has stated the cuts can be deep for farmers and ranchers. When the only solution we can come up is pulling our own teeth, well that really hurts.
The supply-demand report was released at 11 AM CST, right in the middle of the session, which seams perilous for such a volatile market environment. The trade has been lighter as funds are transferred to the strong equity markets, but that also enhances the risk of violent reaction. Corn and wheat came into the report heavily short, while soybeans are range bound. Best guesses project little in the way of change in carry over’s and that is normal for this period in time. South American soybeans are estimated at 52 MT in Argentina and 83 MT in Brazil, or adequate in summation.
At the end of March the acreage and stocks report will we out. Prospective plantings are just that, and the salient point is what the weather will allow. The Quarterly Stocks in all Positions is the prime calibration of domestic usage. A couple things to be mindful of are, diminished feed and ethanol consumption, and export sales have been quite poor in corn, fair in wheat and strong in soybeans, led by China. February, Chinese soybean imports, however, sagged as they attempted to increase domestic prices.
The meat markets have been brutalized by the clever driving hogs down to a RSI of 10. A short covering rally occurred out of that depressed position, but fundamentals remain troubled. Early Friday hogs slide back down and so did the cattle. Pork cut out fell $2.50 in the last week. Boxed beef jumped $10, but cash was unchanged and that is unusual. Cattle futures continued to struggle near their lows. Pastures have improved in the southwest and southeast. The big winter storm put a short term hole in development and transportation in cattle.
The S/D report was unchanged in corn and soybeans with wheat carry over 25 m lower. Market action was mild in the grains, but May soybeans sold off about 13 cents, initially as South American production was verified at record levels. Corn exports were lowered by 75 m bushels and expanded competition in wheat was recognized.
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