MARKET WRAP – STOCKS SOAR

Stocks staged a 1.3% rally on the day on news that Greece would receive bailout funds from the European Union.  Action on the day was a bit odd as the Euro rallied on the news and the dollar sold-off.  This looked like more of a function of short covering in the Euro as opposed to a true move back into the risk trade. Nonetheless, the underlying action was very strong.  Breadth was stronger at 4:1 and upside volume outpaced downside volume by 8:1.

From Daily Futures:

U.S. Economy
The March U.S. dollar index is trading lower with unconfirmed talk that the European Union may be close to a deal that would help resolve Greece’s debt problems.

The U.S. Census Bureau said that wholesale sales were up .8% in December and up 5.7% from a year ago. Inventories were down .8% in December and down 10.2% from a year ago.

The U.S. Treasury said that it sold $40 billion of 3-year T-notes at a median yield of 1.31% with a bid to cover ratio of 2.83. The March U.S. T-bonds are steady to lower.

Grains and Cotton
The USDA’s 2009-2010 U.S. ending stocks estimate for:
Corn was reduced from 1.764 to 1.719 billion bushels.
Soybeans was reduced from 245 to 210 million bushels.
Wheat was increased from 976 to 981 million bushels.
Sugar was reduced from 1.140 to 1.055 million tons.
Cotton was reduced from 4.3 to 3.3 million bales.

May cotton closed sharply higher, boosted by the USDA’s reduced ending stocks estimate.

The USDA’s 2009-2010 world ending stocks estimate for:
Corn was reduced from 136 to 134 million tons.
Soybeans was reduced from 59.8 to 59.7 million tons.
Wheat was increased from 195.6 to 195.9 million tons.
Cotton was increased from 51.7 to 52.1 million bales.
March corn was up 2.5 cents at $3.585.

The USDA’s estimate of Brazil’s soybean crop was raised from 65 to 66 million tons while the estimate for Argentina was kept at 53 million tons. March soybeans were down a nickel at $9.245.

Livestock
The USDA increased its estimate of 2010 beef production from 25.50 to 25.65 billion pounds. The estimated average price for choice steers in 2010 was reduced from 89.5 to 88.0 cents per pounds. April cattle closed up .67 at 91.47.

The USDA reduced its estimate of 2010 pork production from 22.6 to 22.5 billion pounds. The estimated average price for barrows and gilts in 2010 was increased from 46.0 to 47.5 cents per pound (64 cents lean). April hogs closed down .92 at 67.85.

Orange juice
The USDA reduced its estimate of the 2009-2010 Florida orange crop from 135 to 129 million boxes. The projected juice yield was reduced from 1.60 to 1.56 gallons per box at 42.0 degrees Brix, down from last year’s 1.66 gallons per box. March orange juice closed up 3.40 cents at $1.3765.

The USDA also said that eight days of sub-freezing temperatures were recorded in January and that “additional assessments will be made through mid-March.”

Coffee
The International Coffee Organization said in its monthly report today that they expect world production to total 123.6 million bags in 2009-2010, down slightly from a month ago’s estimate. They also said that “world coffee supply could be tight in 2010 since opening stocks are at low levels and climactic factors may affect crop quality.” March coffee ended down .25 at $1.3040.

Metals
April gold closed up $11.00 at $1,077.20, helped by today’s weaker U.S. dollar and hopes that Europe calm financial markets by bailing out Greece.

Energies
Due to weather problems in Washington D.C. the Short-Term Energy Outlook will be released tomorrow.

Currencies
The British Retail Consortium said that same store sales were down .7% in January, the worst performance for January in 15 years.