Sellers beat the buyers on Wednesday
Scott Shellady's Big Picture report from the CME
Hi this is Scott Shellady with a successful farming magazine and agriculture dot com coming to you from the CME group floors in Chicago and you know. Today's markets were not good appear above all. I'm not gonna view on the cash crop but we had everything pretty much -- in the red double digit losses across the board today. I think that's got something to do with the general mail is in the market and I know that there's some folks out there they get a little bit more specific but I think that if we take a 40000 foot view look at this market. We've got some things that are kind of start to crop up and some cracks showing the system that I think we -- to be pretty we area of going forward now. The first thing I like to say is this is that you know would you market your partly a marketing your crops. -- -- take a look at what the caches of what the big board or what the the borders but we also have to kind of keep in mind what the economy's doing and or at the time being -- mean the agriculture economy I think has been one of the economy is out there has been doing very well over the last few years. Going forward I think that you got to keep an eye and I had a couple things went and if these industries to rise that would be something. That will be significant and agricultural community but number two is that what is the general overall economy going to do and don't do your customers have the money. To support the prices that we've got going on here today. Now friends since the good example with dad. And ADP. Payroll number that came out today which is kind of a precursor of the nonfarm payrolls we're gonna have a -- this week. We have some pursuit -- manufacturing next numbers that came out of Europe today we had -- ISM number here yesterday which is as -- -- managers here in the states that does is another good. Financial indicator and generally speaking. Yes some number we had yesterday was okay. But the PMI the person and -- an -- that we got of the European countries today was absolutely horrible. And the eighty. But the equity markets continued to shrug this off so. We have a disconnect going on our economy between. What's actually happening in the economy and what these equity markets are doing so I just want everybody out there to take now because I'm sure you've got some Portland Kaczur maybe even trading at. -- but the traders behind me were exasperated because we've got a situation here with the government has been flooding the market with all of us cash and and flooding the market all the cash. To keep the firms out of trouble it's distorted equity prices and you know we've heard about this earnings season what what how great -- well it's been great but there are some. There are some firms that have beaten expectations which makes the earnings season great. But they've beaten expectations. After they were bailed out so we've got the government now in our equity markets and that's kept things buoyant. And if your fund manager out there you can afford not to be an equity markets because. It's been a straight up mind since basically October of last year so you'd be negligent here with your. Customer money if you weren't fully invested. So we've got enough interest in things that happened out there and the pictures are starting to show because. We are going to either have to see. -- economies suddenly ramp up and catch up to those equity prices. Or the equity prices fall off a cliff and catch up to where the economy is going -- since 19100 every time we've had ourselves in this situation. I've set a time and time again the first two things that lead us out and number one jobs and number two housing. Well if anybody can go back and -- take a look we've got an eight point 2% unemployment rate. And the housing has not done anything at arguably has gotten worse we've actually got a deflationary housing market. So without a deflationary housing market and eight point 2% unemployment rate. And all the money in stimulus that we've thrown of this problem. It's telling me the number one we don't have an answer number two we don't know what the answer is going forward. I think that ultimately what we're gonna have to do -- see a big -- and get rid of the status quo in the old ideas and find something new because you know were the first to really. Criticize Europe and extend a pretender kick the can on the road we've all heard those analogies we talk about Greece Spain Italy France Portugal. But you know what what's QE1 quality he's won here quantitative easy to hear we've had that we've had Operation Twist and our bond market and we've got the Specter of QE3. Well that's just the same thing as what they're doing in Europe so. How are we to be throwing judgment upon us when we're actually standing in returning. Ourselves so I want everybody be out there to be extra careful these are Shiites because the equity markets make me feel like we're running out of boxes at this level. And the economy is telling you that we're just not doing them much better we've we get a big hit a body Europe you can see things. Go south here fairly quickly so. We had a negative day over and the grain complex and ultimately think they you know what what we've got going on that core market. And what the cash is talking I think things are very -- -- could -- around there but boy oh boy you have -- good timing because that rally to try to alliance but hurt him bad lately so. At a state backup -- your take a look at what -- does to you. Amazement that we slow period for us over there and watch how this cash market shakes out because of the -- of -- we're going next in corn. Other than that. Be very very proud cautious with that equity market if you've got a 401K I'd like to see some sort of airing out there because ultimately I think that -- -- should be flowing towards these funds in another party very high. And there's another twenty or thirty -- and a market going forward. I just wanna really be a little bit cautious because I just have a point feeling about what we've got coming up the next six months I just don't see improvement -- the Talking Heads up there. So negative -- in the -- -- the cash would be telling us we're like one markets open on I would say it's going to be higher but right now the -- beat the buyers at least one. I'm Scott saw it right we'll back comments to us bombing magazine. If we don't force. Yeah.
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