. Mayday, Mayday, Mayday. Well, no more days left in May, but the distress calls can still be heard on Wall Street.
After gaining nearly 1,000 points in the first quarter of 2012, the Dow Jones Industrials pulled back modestly in April. And then came May... when the Dow posted gains in only five trading sessions, tying a record dating back to 1969.
June didn't begin any better... The Labor Department reported Friday that U.S. employers added just 69,000 jobs last month. That's the smallest monthly gain in a year. And for the first time in 11 months, America's unemployment rate WENT UP... rising one-tenth of a point to 8.2 percent.
The Dow plunged more than 270 points on the news to post its worst day of the year. And when the dust settled Friday, all 2012 gains had been wiped out.
Next week, the government will release key reports on manufacturing and the U.S. trade deficit. Agriculture, of course, occupies an all-too-rare bright spot in America's trading portfolio. But in their latest estimates, USDA analysts predicted the record $43 billion agricultural trade surplus recorded last year will narrow significantly in 2012.
In its latest Outlook for U.S. Agricultural Trade report, officials predicted the world economy will slow in the months ahead due to economic turmoil in Europe, reduced growth in Asia and a stronger U.S. dollar.
U.S. exports are predicted to decline slightly from last year’s record high due to increased competition from the former Soviet Union and South America. As a result, U.S. exports are estimated to fall to $131 billion – down 5 percent from the all-time high tallied last year.
Regardless of how many bushels are exported, the value of corn exports is expected to decline due, primarily, to prospects for a record U.S. crop and greater foreign competition.
As expected, U.S. soybean shipments are forecast to decline due to greater early season shipments from South America. However, U.S. soybeans may be in a more competitive position given reduced prospects for the current crop in Brazil and Argentina.
Wheat exports are expected to fall 30 percent due to record world supply and lower prices in breadbasket regions of the former Soviet Union now behind Russian and Ukrainian borders.
Cotton exports also are expected to be 30 percent lower, due to lower U.S. supplies and falling prices.
While U.S. exports are predicted to decline imports of foreign goods are expected to rise 13 percent to $106.5 billion. If realized, that would be the second consecutive record year. However, USDA officials believe maintaining the double digit increase for the entire year will be difficult.
The bottom line? America’s agricultural trade surplus is expected to narrow to $24.5 billion … down more than 40 percent from the 2011 record high of $43 billion.