155,000 jobs added as expected in monthly report and unemployment unchanged at 7.8%. Stocks have been holding their fiscal follies rally, but contentious debt, spending, sequester, and entitlement debates are just weeks away. Our collective attitude seams rather lethargic.
Crude rallied on fiscal notions, while gold plunged from near $1700 to $1640 early Friday. A strong dollar index at 80.71 stifles exports as it challenges over head resistance at 82.
European and Chinese economic indicators are betwixt, but still not healthy. In other words, we have a full closet on concerns.
Grain and oilseeds were pressing chart support levels early Friday at $6.83 1/’2 on March corn, $13.72 on March soybeans and $7.52 ½ March wheat. Weekly exports were lighter in wheat at 400,000 tons down from 1 MT with corn at an embarrassing 49,000 tons and soybean down to 434,000. Chinahas cancelled more US sales then normal, in their switch to South American supplies, and last week bought just 360,000 tons. Brazil’s soybean harvest is underway and results have been good. An American observer estimates 83 MT of production. Argentine corn plantings are on par and wheat harvest is 15% behind a year ago.
Private crop guesses are beginning for next Friday’s final crop estimate and stocks report.
The logistically challengedMississippi riverlow water levels may reach the critical stage next week, with no moisture relief in sight. It will take an above average snow pack to bring us back to normal levels. The ongoing drought remains in force, and there is precedence for multi year dryness.
Soy oil led the complex last week following the bio diesel decision. Watch the meal-oil spread for the best gauge of comparative strength.
The trend is clearly down, but in this speculative crazed environment violent short covering is just a key stroke away.
The spread between cattle cash bids and offers was quite wide at $125 to $131. Feb futures were an exaggerated $7 over last week’s cash of $127. $134.50 has been the high tick on Feb cattle. Dry pastures are pushing cattle into feedlots. Colder temps are cutting slaughter weights from 30# higher. The winter has been benign thus far. Beef exports were light at 8,400 tons last week. Hog margins improved, but remained in the red. Pork cutout was strong at week’s end on good 144 load volume. Normalization of diets will now measure meat demand.
Grains and soybeans were continuing to beat a retreat late in the session with next support at $6.50 on March corn, $13.00 March soybeans and $$7.00 March wheat.