Market Update - April 12, 2013

Posted on Apr 12, 2013
Traders continue to support the nearby (old-crop) corn and soybean futures contracts at the expense of new-crop contracts. If there’s anything that will increase in price, it will be those nearby contracts. Analysts foresee considerable downside risk in the 2013-crop corn and soybean prices without another weather disaster. Some meteorologists expect the 2013 growing season to average warmer and drier than normal with the western Corn Belt still not recharging subsoil moisture (the eastern Corn Belt has had much more precipitation).

Wheat is the strongest commodity today, reaching the highs of the day. Possible purchases by China and Brazil, as well as recent undetermined freeze damage are supportive.

Cattle and hog futures are little changed as friendly fundamental news continues to be evasive. Actually, today’s consumer news is bearish red meat demand.

While the U.S. equity markets have set new all-time highs this week, today’s economic data was rather negative. Thus stocks are lower as are Treasury rates. Also, it appears problems in the weakest Eurozone countries are worsening again. This weak economic news is also weighing heavily on energy futures and precious metals. Grain and livestock futures are actually holding up well in light of this.

Corn May +7 658; Jly +7 640; Dec +4 548 Bean May +10 1412; Jly +9 1377; Nov unch 1227 Meal May +5 400; Oct +1 340   Oil -53 4924 Wheat May +17 714; Jly +16 719; Dec +14 738 KC Jly +13 760; MGE +15 799 Oats +3 370 Rice +6 1583

LC Apr +40 12597; Aug +17 12145; Dec -5 12677 FC Apr -32 13890; May -25 14152; Aug -40 14842 LH Apr -40 8700; Jun -15 8930; Oct -17 8082 Milk Apr +4 1763; May +5 1879 

U.S. economic data out this morning has been negative    The Thomson Reuters/University of Michigan's preliminary reading on the overall index of consumer sentiment fell to 72.3 in April, a level last seen in July, 2012, and below economists' forecasts of 78.5. The index stood at 78.6 last month.    March retail sales declined .4%, which compares to the estimate of unchanged and retail sales, excluding autos, were down .4% when unchanged was anticipated.  The March producer price index fell .6%, which compares to the estimate of down .2% and the produce price index, excluding food and energy, increased .2%, as expected.

US$ steady Dow -.2% SP -.5% NAS -.5% Tran -.4%   VIX +4.4% 12.78

WTI -2.5% Brent -2.1% Gas -1.3% NG +2.3% HO -1.3% Eth -1%

Gold -3.9% Slvr -4.9%

5-yr -.03 0.70% 10yr -.06 1.73% 30yr -.07 2.92%  WORLD DAIRY PRICE INDEX SURGES 10 PERCENT The Food and Agriculture Organization's (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 212.4 points in March, up 1 percent from 210.7 in February and its highest since October 2012.

"All the dynamic this month comes from the dairy," said FAO senior economist Concepcion Calpe. "In general the situation is relatively calm." 

FAO's dairy price sub-index jumped 22 points in March to 225.3, one of its largest changes ever recorded.  The rise was fuelled mainly by prolonged hot, dry weather in Oceania which has hit pastures and led to milk production falling off steeply and a subsequent decrease in processing of dairy products, which include butter, cheese and milk powder. 

FAO's dairy products index is based on prices in the world's largest dairy exporter New Zealand, which have climbed as buyers bid against each other to meet commitments.  A usual spring surge in milk production in Europe has also been slowed down by unfavorable weather limiting pasture growth, FAO said. 

The FAO food price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 212.4 points in March, up 1 percent from 210.7 in February and its highest since October 2012.

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Tagged Post Topics Include: Economics, Market updates