Dow Making Run At All-Time High

March 4, 2013 11:46 PM

What Traders are Talking About:

* Dow making run at all-time high. The Dow Jones Industrial Average is flirting with the all-time high (14,198.10) and all-time high close (14,164.53), posted on Oct. 11 and Oct. 9 of 2007, respectively. On Monday, the Dow posted its second highest close ever and Dow futures are signaling a higher open this morning. So... today could be the day the Dow makes a new high and posts an all-time high close. While there are some concerns with the sluggish economy, the Dow signals investor attitudes are strong. That's backed up by rising consumer sentiment.

The long and short of it: While the Dow is strong, the Continuous Commodity Index continues to slump. That signals money is flowing out of commodities an into stocks. As long as that's the case, it will be hard for the commodity sector, as a whole, to stage a sustained price recovery.

* China releases yearly projections. As part of its annual National People's Congress planning meeting, China released this year's economic and output projections. According to outgoing Premier Wen Jiabao, China aims to grow its economy at a 7.5% clip this year and to hold consumer price inflation around 3.5%. Wen also says China will have a 2013 fiscal deficit of 1.2 trillion yuan ($192.8 billion), or around 2% of GDP. For agriculture, Wen says grain production should top 500 MMT this year. China also plans to continue to stockpile corn, soybeans, rapeseed, cotton and sugar in an attempt to support domestic prices. And the Chinese government will continue to closely regulate hog prices.

The long and short of it: These projections are worst-case scenarios for China and therefore, should be fairly easy to achieve. With that said, there were no surprises in the yearly projections.

* ABARES sees bigger crop, but smaller exports in 2013-14. Australian wheat production is projected to rise 13% to 24.9 MMT in 2013-14 amid increased planted acres and higher yields, according to the initial forecast from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). Despite an expected increase in output, ABARES sees wheat exports falling 5% to 21 MMT in 2013-14. Meanwhile, ABARES modestly upped its 2012-13 Aussie wheat crop to 22.077 MMT from 22.035 MMT previously.

The long and short of it: The forecast for reduced Aussie wheat exports in 2013-14 suggests the U.S. could regain some of the export business Australia "stole" in the current marketing year.


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