Apr 16, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin


October 2013 Archive for The Allendale Wake-Up Call

RSS By: Paul Georgy, AgWeb.com

Paul Georgy serves as president/CEO of Allendale, Inc., a worldwide agricultural advisory and research firm that provides agricultural commodity price research and risk management alternatives for producers, major food companies, international corporations, foreign governments, and major news vendors.
 

Halloween and USDA Reports on the Same Day?

Oct 31, 2013

Good Morning! Paul Georgy with early morning comments for October 31, 2013 at 5:00 am. Grain futures are higher on short-covering ahead of the USDA updating several reports today.

Farmers take a well needed break from harvest after working countless hours before the rain moves across the Midwest. This should give them a chance to do some necessary repairs and move some grain out of on-farm storage. The forecast is for this system to drop .5 to 2.0 inches of rain over the next 48 hours. Then a drier, warm forecast for the following 5 days.

There were no deliveries against the November contract of soybeans as cash market premiums remain strong. Farmers holding on to beans and export demand are two reasons we are not seeing deliveries even with November futures over January.

The USDA will give us the export sales for the last 3 weeks in a cumulative number. It will not be broken down by week. Trade estimates for the weekly export sales report update are: corn 1.9 to 2.5 mmt, soybeans 2.4 to 3.0 mmt, soymeal .8 to 1.1 mmt and wheat 1.5 to 2.0 mmt.

Funds were net sellers of 4,000 contracts of corn and wheat while net buyers of 3,000 soybean contracts on Wednesday.

If you didn’t have time to listen in on the October Ag Leaders Webinar you can NOW, click here.

Soyoil use for biodiesel production during August was the largest since December of 2011 (the month before the $1.00 tax credit was dropped).

CFTC released Commitment of Traders report for Oct 15 yesterday afternoon. Managed funds were still heavily short corn and they increased long positions in soybeans and wheat.

Cargill announced late Wednesday that they will not buy any cattle that have been fed Zilmax until the animal welfare issues are resolved.

The USDA rescheduled the October 18 Cattle on Feed Report for today at 2:00 pm. Traders are concerned about the placement number being above last year. Some trade sources believe that due to better pasture conditions and tight supplies of feeder cattle placements we may be below last year’s record low number.

October cattle contract stops trading today at 12:00 noon. Beef cutout values were higher on Wednesday with choice up 1.44 and select up 1.97. The CME Feeder Index was 165.24 down .11.

Weaker cash hog markets due to large hog runs have carried over to the futures. The weather system moving across the Midwest has allowed farmers to catch up on any delayed hog movement. Futures remain in an uptrend with support in the Dec contract at 89.90. Pork cutout values were down 1.41.

Markets as of 5:00 AM

  • Dec Corn    +3 3/4
  • Nov Beans   +8 1/2
  • Dec Wheat   + 3/4
  • Dec Cattle  +.10
  • Dec Hogs    -.32
  • Dec Dlr     +.14
  • Dec S&P     -4.5
  • Dec Crude   +.06
  • Dec Gold    -14.70

 

Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Grains Recover Ahead Of Export Sales

Oct 30, 2013

Good Morning! Paul Georgy with early morning comments for October 30, 2013 at 5:00 am.  Grain futures are higher as traders bargain hunt ahead of export sales data.

Those of you who could not attend the Allendale Ag Leaders Webinar last night can listen to the comments by clicking here.

Grain markets are looking for a catalyst that will provide a rally. Currently, fundamental news is weighing on price as producers report above average yields in corn. Soybean yield reports are all over the board. Tomorrow, the USDA will give the export sales results for the last 3 weeks. The data will not be petitioned by week, we will see only a total for the period. The sale results are expected to be sizable as it is thought China was a buyer during that period when soybeans made recent lows.

The weather system that is forecast to move across the Midwest late this week will drive farmers out of the field and give them some time to move grain out of their farm storage facilities. This could have an impact on basis.

South American weather is improving for the corn and soybean planting season. Due to heavy rains this week in Argentina there is some concern that wheat, which is about 2 weeks away from harvest, has seen some damage. This could compound their already tight supply of "breading making" quality wheat.

The Fed will release the minutes of their meeting this afternoon. Traders will be looking for comments regarding when tapering may begin.

In the last three sessions lean hog futures rallied a total of $3.80 in the December and $4.35 in the February. Yesterday’s 52 cent lower close does not imply a top, it would suggest profit taking. Adding to the confusion the newly released August trade info showed August pork exports 4% lower than last year while imports were 9% higher than last year. Pork cutout values were down .77.

December and February live cattle futures posted their highest close of this uptrend on Tuesday. There is talk that cash cattle could trade at new highs again this week. Beef cutout values were higher with choice up 1.12 and select was up .62. The CME Feeder index is 165.35 up .02.

Markets as of 5:00 AM

  • Dec Corn    + 3/4
  • Nov Beans   +6 3/4
  • Dec Wheat   +2 1/4
  • Dec Cattle  +.10
  • Dec Hogs    -.15
  • Dec Dlr     -.05
  • Dec S&P     +5.25
  • Dec Crude   -.63
  • Dec Gold    +2.80
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Corn Harvest Jumps 20% In One Week

Oct 29, 2013

Good Morning! Paul Georgy with early morning comments for October 29, 2013 at 4:45 am.  Grain futures are mixed as soybeans and wheat are higher and corn is slightly lower.

Traders are looking for "Turnaround Tuesday" to help support the grain markets. Technical damage to the chart picture on Monday has traders cautious as fundamental news is continuing to weigh on price projections.

The week ahead has more uncertainty with the FOMC meeting today and tomorrow. Thursday, the USDA will give us an update to export sales for the month of October. Thursday is also first notice day for November beans and then the USDA Supply and Demand Report is a little over a week away.

USDA says corn harvest is 59% complete which is a weekly increase of 20%. This is only the 4th time US farmers have harvested 20% or more in 1 week. Soybean harvest stands at 77% done which is a 14% increase from last week.

Trade analysts are starting to share their estimates for the Nov 8th report. There have been some average corn yields being tossed around as high as 162 bushels per acre. Informa is expected to release their estimates later this week.

The CFTC will hold a public hearing on the residual interest rule which if implemented could institute an increase in margin requirement for market participants.

Allendale’s Ag Leaders Webinar for October is scheduled for this evening, sign-up today.

Beef cutout values jumped on Monday as choice was up 2.15 and select was up 2.10. CME Feeder index was up .26 to 165.33. Tight, fed cattle supplies are providing support to live cattle futures. Traders are expecting cash cattle to post new all-time highs this week.

Lean Hog futures are on fire as the trade tries to get a handle on the effects of the PED virus. Current hog slaughter is running 5 to 6% below what the last USDA Hogs and Pigs Report would suggest. The effects of the PED virus is not expected to affect slaughter supplies until late in the 4th quarter; this uncertainty is definitely driving prices. Pork cutout was up .48 on Monday.

Markets as of 4:45 AM

  • Dec Corn    – 3/4
  • Nov Beans   +1 1/4
  • Dec Wheat   +1 3/4
  • Dec Cattle  -.05
  • Dec Hogs    -.22
  • Dec Dlr     +.22
  • Dec S&P     -.75
  • Dec Crude   -.44
  • Dec Gold    -6.50
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Is Soybean Harvest Almost Complete?

Oct 28, 2013

Good Morning! Paul Georgy with early morning comments for October 28, 2013 at 5:00 am.  Grain futures are lower as weather forecasts and harvest progress weigh on markets.

Producers are working to get as many soybeans harvested before the rain moves into the Midwest in the middle of the week. This system is expected to hang around for 3 days then gives way to dry weather again. The USDA should provide some harvest progress estimates later today for corn and soybeans. Traders are looking for corn harvest to be 50% complete and soybeans around 80% done.

Argentina has well needed rain in the forecast over the next 5 days. This could provide a negative bias to CME contracts.

Corn and soybean demand remains good for exports, processors and ethanol plants. The lack of farmer selling is supporting basis level in soybeans. Corn being harvested at variable moisture levels is causing logistics problems.

Traders will be waiting for the USDA to gives us all of the catch-up data on export sales this Thursday.

The CFTC released the Commitment of Traders report through October 1st. They showed managed funds net short 151,918 corn contracts and net long 109,860 contracts of soybeans and 3,332 contracts of wheat. The CFTC is expected to get caught up on data on the November 8th report.

Egypt is expected to tender for wheat over the next few weeks for a supply that will cover their needs until late March of 2014.

Fed cattle futures got a boost from news that Tyson will stop buying market-ready cattle of Canadian origin. However, they will still buy feeder cattle and place the in US feedlots. This news further tightens supplies of market-ready cattle. Beef cutout values were lower on Friday with choice down .10 and select down .28. The CME Feeder index was 165.02 up .23.

Pork cutout values were up .03. The cash hog index was 91.40 up .15. December futures closed strong but still remains at discount to the cash index. Hog futures are showing signs of a technical overbought condition. We suggest using risk management tools to protect positions.

Allendale’s Ag Leaders Webinar for October is scheduled for Tuesday evening, sign-up today.

Markets as of 5:00 AM

  • Dec Corn    - 3/4
  • Nov Beans   -3
  • Dec Wheat   -1 1/2
  • Dec Cattle  steady
  • Dec Hogs    steady
  • Dec Dlr     -.01
  • Dec S&P     +4.50
  • Dec Crude   -.02
  • Dec Gold    -.60
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Will We See Hedge Pressure On The Close?

Oct 25, 2013

Good Morning! Paul Georgy with early morning comments for October 25, 2013 at 5:00 am.  Grain futures are mixed in another quiet overnight session. Asian stock markets are lower as China’s credit crunch fuels concern.

November options expire today and it appears prices are migrating to 13.00 in November soybeans and 4.40 in December corn. Traders are struggling with friendly export sales reports and the probability that the November Supply and Demand report will show higher yields and larger ending stocks.

A USDA official said the November 8 crop report will include planted and harvested acreage adjustments that normally would be released in October. The USDA will be using the FSA planted acreage information.

There is talk that India may be dumping wheat on the export market at $260 due to poor storage facilities. The government is reluctant to sell it at a loss but it may be better than having nothing to sell.

Traders are looking for hedge pressure late in the session today as harvest should be in full swing this weekend. The weather should give producers an opportunity to accelerate harvest through middle of next week.

Hog futures rallied this week on talk of more PED virus problems for the hog industry. Technical buying was also cited as a supportive factor as Dec futures test recent highs. Pork cutout values were up .81.

Cash cattle were $2 to $3 higher this week. Cutout values were higher on Thursday with choice up .28 and select up .77. The CME Feeder index was 164.84.

Allendale’s Ag Leaders Webinar for October is scheduled for next Tuesday evening, sign-up today.

Markets as of 5:00 AM

  • Dec Corn    +1 1/2
  • Nov Beans   -1 1/2
  • Dec Wheat   +5
  • Dec Cattle  +.17
  • Dec Hogs    +.05
  • Dec Dlr     +.01
  • Dec S&P     -.75
  • Dec Crude   +.35
  • Dec Gold    -7.40
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Quiet Markets as They Wait for News

Oct 24, 2013

Good Morning! Paul Georgy with early morning comments for October 24, 2013 at 5:00 am. Grain futures are slightly higher as trade waits for a bit of news. Weather forecast is for more moisture during the next week which will disrupt harvest.

Ethanol producers are responding to the very strong profit incentive with good production totals. Last week’s ethanol production was 12% over last year. Traders are now thinking that any revision by the EPA will have very little impact on USDA’s current projections. We cannot forget this year’s production is being compared to some very low production numbers a year ago.

Join us on October 29th at 8PM as we talk about the future of the ethanol industry and its impact on the corn market with Geoff Cooper from the RFA. Register here.

The USDA is expected to release the export data from the week ending Oct 3 this morning at 7:30. They will release some additional data tomorrow. Trade estimates for USDA’s weekly export sales report are: wheat 600 to 850 tmt, corn 650 to 850 tmt, soybeans 850 to 1,050 tmt, soymeal 150to 250 tmt, soyoil 10to 20 tmt.

The CFTC will release the delayed commitment of traders report over the next 2 weeks. The will be resuming their regular scheduled release on Nov 8th.

November soybean option expiration is Friday and the largest combined open interest is at the 13.00 strike. The open interest in the November soybean futures is very large going into first notice day next Thursday. This could create volatility before month end. The November futures are carrying a premium to January however trade is not expecting many deliveries.

The Argentina bread problem is reported to have escalated to riots in some areas while wheat prices have gained to over $17.00 per bushel. The Argentine new crop wheat harvest is still a few weeks away.

Iraq bought 150,000 tonnes of Australian and Canadian wheat this week.

Crude oil prices bounce after the report of supplies growing. Traders are now talking about the 95 area as a downside target for nearby futures.

Choice beef cutout values pushed through the 200 level on Wednesday when values were up 1.46. Select beef cutout value was up 1.88. Packers paid as much as 133 in TX and KS already this week. Tight market-ready cattle supplies continue to provide underlying support. December futures have resistance at 134.00. The CME feeder index is 164.59, unchanged from Tuesday.

Pork cutout values were down 2.01 on Wednesday. The December Lean Hog futures have resistance at 89 and support at 86.00.

Allendale’s Ag Leaders Webinar for October is scheduled for next Tuesday evening, sign-up today.

Markets as of 5:00 AM

  • Dec Corn    + 3/4
  • Nov Beans   – 1/2
  • Dec Wheat   +1 1/4
  • Dec Cattle  +.37
  • Dec Hogs    -.07
  • Dec Dlr     -.09
  • Dec S&P     +6.00
  • Dec Crude   +.27
  • Dec Gold    +3.60
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Can Wheat Carry The Load?

Oct 23, 2013

Good Morning! Paul Georgy with early morning comments for October 23, 2013 at 5:00 am.  Grain futures are higher on short-covering. Corn remains in a 10 cent trading range for 7 sessions. Soybeans have pushed through breakout resistance at 13.06 while wheat continues to grind higher.

Trade is expecting a good sales number from USDA when they release the weekly sales data for week ending Oct. 3, on Thursday. EIA data should be released later this morning.

Weather in South America suggests good coverage for most of Brazil over the next 10 days however Argentina remains dry during this period. The 10 to 15 day forecast for Argentina provides more moisture for the region.

The supply bears are waiting for a confirmation of big yields from USDA on the November 8th S+D report. The demand bulls are hoping for some large sales numbers on Thursday and again on Oct 31st.

We'll discuss the market impact of lowering EPA's Renewable Fuel Standard in our next monthly webinar - 10/29/13 at 8:00 PM CDT. This is a no cost event, register here.  

November option expiration is on Friday and we have not received confirmation on when CFTC will release an update to the Commitment of Traders report.

The wheat supply and demand table suggests the world has a plentiful supply. However, the areas creating concern are the Black Sea region where prices have jumped nearly $100 a ton in a few weeks and in Argentina where inflation and lack of farmer selling is driving prices higher. This news is supporting prices at the CME. Technical buying is also a catalyst as nearby contracts break overhead resistance. Stay in touch with your Allendale Broker for strategies.

Cattle traders are getting hope from the stronger beef cutout values. Tuesday’s choice beef prices closed up 1.04 and select was up 1.38. The stronger beef values could give packers a reason to pay the 131 feedlots are asking this week.

Pork cutout values were down .15 as some retailers have turned to featuring pork as beef crossed the 2.00 mark again. As we move into November both beef and pork will take a back seat to turkey featuring. A close above the 89.00 level in Dec hog futures is needed to keep the uptrend going.

Call your Allendale Representative with question at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn    +3 3/4
  • Nov Beans   +6 3/4
  • Dec Wheat   +6 1/4
  • Dec Cattle  +.27
  • Dec Hogs    +.00
  • Dec Dlr     +.07
  • Dec S&P     -10.00
  • Dec Crude   -1.12
  • Dec Gold    -10.70
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Beans Lead Grains Lower Overnight

Oct 22, 2013

Good Morning! Paul Georgy with early morning comments for October 22, 2013 at 5:00 am.  Grain futures are mostly lower on harvest progress and larger than expected yield reports.

USDA says corn harvest is only 39% complete compared to 53% average. Large yields and slow dry down is providing a few reasons for the slow pace. Soybean harvest is near normal with 63% complete compared to 69% average. The weather systems moving across the Midwest have kept bean harvest from reaching normal levels. Winter wheat planting progress was 79%, in line with the five year average.

A Reuter’s poll of analysts placed corn production in 2013 less than USDA’s September estimate. However, yield reports from producers continue to run much higher than they were expecting. Analysts put soybean production approximately 40 million bushels larger than the last USDA estimate.

We’ll discuss the market impact of lowering EPA’s Renewable Fuel Standard in our next monthly webinar – 10/29/13 at 8:00 PM CDT. This is a no cost event, register here.  

Export sales for soybeans as of the end of September are currently 71% of the USDA total yearly target. This would suggest USDA would likely raise their soybean export number on the November report.

South Korea has issued a tender to buy 140,000 tonnes of corn and 60,000 tonnes of feed wheat.

The Energy Dept. released ethanol production numbers yesterday which were above last year and now puts corn for ethanol usage pace above the USDA’s target for the year. The EPA decision on mandate will be very important to overall corn usage in 2013/14.

The economic calendar is filled with reports today. The focus will be the US Non-farm payroll results where the expectation is for a gain of 185,000 jobs while holding unemployment steady at 7.3%.

Cattle slaughter is running 3.6% below same period a year ago. Packer margins have deteriorated as wholesale beef has struggled to firm up. The Greeley, CO plant is open and operating as workers and management work out a contract. Beef cutout values were higher on Monday with choice up 2.00 and select up 1.67. The CME feeder index was set at 164.81, up 4.89 from last report.

Pork production continues to trend higher and should continue into mid-November. There is talk that producers have held back some inventory during the USDA shutdown. Pork cutout values were up 1.35 on Monday.

Call your Allendale Representative with question at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn    +0
  • Nov Beans   -10 1/2
  • Dec Wheat   -3 1/2
  • Dec Cattle  +.15
  • Dec Hogs    +.37
  • Dec Dlr     +.05
  • Dec S&P     -1.00
  • Nov Crude   -.33
  • Dec Gold    -3.60
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Harvest Progressing But At Slower Pace

Oct 21, 2013

Good Morning! Paul Georgy with early morning comments for October 21, 2013 at 5:00 am. Grain futures are higher in a quiet session. The lack of current USDA data has traders cautious.

The government is expected to release the weekly crop progress report this afternoon. Returning from my trip to Southern IL, I realize we have a lot of harvest yet to do. Producers are dealing with a corn crop that is slow to dry and a lot more volume to handle. Soybeans look ready but the intermittent showers are slowing harvest.

 

We'll discuss the market impact of lowering EPA's Renewable Fuel Standard in our next monthly webinar - 10/29/13 at 8:00 PM CDT. This is a no cost event, register here.  

 

The USDA has put together a 2 week plan to get export sales updated. On October 24 they will release the data from week ending October 3. On October 31 they will give an update on sales from October 4 through 24.

 

The USDA released the weekly export data from the week ending September 26, on Friday. Corn was 775,200 tonnes, soybeans 860,700 and wheat 837,800 tonnes. The trade estimates for the week were 500 to 700 tmt of corn, 800 tmt to 1.1 mmt tonnes of soybeans and 500 to 750 tmt of wheat.

 

On a survey done by Reuters, traders raised their national average corn yield from 156.5 to 157.2 bushels per acre. Soybeans yield estimates were raised from 41.7 to 41.9 in the poll.

China says they are not going to stop auctioning beans from their reserve as they begin to buy beans to stock pile from domestic harvest.

 

Beef cutout values were mixed on Friday. Choice us up .26 at 196.29 and select was down 1.74 at 179.98. Cash markets traded at 129 to 130. The big, outside day reversal on Thursday cattle futures and then the slight rally on Friday has technical traders concerned of a near term top. Fundamental news could give us a higher opening this morning.

 

Pork cutouts were down 1.58 at 94.30. December hog futures have support at 86.00 and resistance at 89.00.

 

Call your Allendale Representative with question at 800-262-7538.

 

Markets as of 5:00 AM

  • Dec Corn    +1 3/4
  • Nov Beans   +3 3/4
  • Dec Wheat   +3 1/2
  • Dec Cattle  Steady-Higher
  • Dec Hogs    Steady
  • Dec Dlr     +.01
  • Dec S&P     +.75
  • Nov Crude   -.97
  • Dec Gold    +.80
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Does Argentina Hold Key To HRW Price?

Oct 18, 2013

Good Morning! Paul Georgy with early morning comments for October 18, 2013 at 5:00 am. Grain futures are higher lead by wheat. A pickup in demand and production worries around the world drive buyers.

This report is coming to you from Carbondale, IL where I have the honor of serving on the SIU College of Ag Leadership Board today.

The USDA will announce this morning when they will resume the export sales reporting. They said the next Supply and Demand report will be on November 8.I had the opportunity to have dinner last evening with a retired USDA official who had gone through several government shut downs. He felt the data is likely being accumulated but it may take the USDA a few days to catch up on processing.

Interior corn basis is weaker as farmers shift harvest from beans to corn. However gulf demand for soybeans and meal improved due China demand.

President Obama says his priority now is on getting a new farm bill. He is urging congress to pass a bill without steep cuts to food stamps.

Japan buys 112,031 tonnes of wheat split between US, Canada and Australia.

Reuters is collecting updated yield and production estimates from industry analysts. Allendale’s submission is bumped up slightly to 158.2 for corn and 42.4 soybeans.Southeast IA yield results are not as robust as other areas. Corn yields are being reported at 162 verses an APH of 178. Soybeans are running in the 30’s.

Argentina Ag Minister pegs their wheat crop at only 8.8 mmt compared to USDA’s 12 mmt estimate. Traders are waiting for any indication Argentine wheat exports could be halted. This would place an additional strain on tight US Hard Red Wheat carryover.

Cash hogs have a strong seasonal of trending lower into mid-November. However traders seem to have the attitude of “I want to see it before I believe it.” December futures remain at a minimal discount to where October went off the board. Previous USDA data would suggest a different picture.

Cattle futures traders had to deal with the good news of 129 being paid for cash cattle in the south and the negative news of a possible strike at the JBS Greely, CO plant over new company health plan. Now they have to deal with a huge “outside day” on the charts after Thursday’s trade. It is important to rebound in the next few sessions to keep the uptrend intact.

Call your Allendale Representative with question at 800-262-7538.

Markets as of 5:00 AM

Dec Corn +2 1/4
Nov Beans +4 3/4
Dec Wheat +9 1/2
Dec Cattle +.02
Dec Hogs +.15
Dec Dlr -.14
Dec S&P +1.75
Nov Crude +.31
Dec Gold -2.20

Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

When Will The Government Start Releasing Data Again?

Oct 17, 2013

Good Morning! Paul Georgy with early morning comments for October 17, 2013 at 5:00 am. Grain futures are higher as traders wait for USDA to update the export and production data. The equity markets have retracted some of early week gains as they digest the government’s move to do it all again in 3 months. The US Dollar is down sharply this morning.

A producer said yesterday “If we are getting these yields in a bad year what would we get in a normal weather year?” His yields are running well over 200 and more than 40% harvested.

We will not be getting a USDA Weekly export sales report this morning but some exporters are saying that soybean sales could be as much as 3 mmt since last data was reported.

Gulf basis for exportable corn is steady as many think China could have bought another 2 cargos on top of the 300,000 tonnes purchased earlier. Currently US corn is $30 to $35 per tonne cheaper than Chinese corn. Could be a reason for their buying interest?

The USDA says they will decide by the end of the week whether or not to cancel the October Crop Report.

After years of deliberation, a judge in Mexico has placed an indefinite ban on growing genetically-engineered corn. However this does not mean they cannot purchase GMO grain, they just cannot produce it.

The top negotiators for the Farm Bill suggest they could have a full Senate/House meeting before end of October.

Informa is expected to be putting out estimates for 2014 acreage and production on Friday at 10:30.

December Lean Hog futures posted new contract highs of 89.05 before settling moderately under that price on Wednesday. Comparing October futures settlement to Dec price suggests futures are pricing in almost no drop in cash hog prices. Long time hog market watchers know a discount is certainly needed. Supplies normally continue to rise until their weekly peak sometime in mid-November to mid-December. USDA data would help clear up the concern.

Cattle traders had a favorable response to the government getting back to work by retesting highs made just 2 day ago. A cattle on feed report is due to be released on Friday but likely will be re-scheduled by USDA.

Call your Allendale Representative with question at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn +3
  • Nov Beans +3 3/4
  • Dec Wheat +6
  • Dec Cattle -.02
  • Dec Hogs -.10
  • Dec Dlr -.56
  • Dec S&P =3.50
  • Nov Crude -.52
  • Dec Gold +24.70
  •  
Chart of the Day

 

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Quiet Trade As We Wait For A Resolution

Oct 16, 2013

Good Morning! Paul Georgy with early morning comments for October 16, 2013 at 5:00 am.  Grain futures are slightly higher on light volume. Global financial markets are waiting for Washington to make a decision on the debt ceiling and reopening of the government before tomorrow’s deadline.

Spreaders take some profits out of their long wheat/short corn spreads on Tuesday. We saw some buying wheat/selling corn overnight. Traders are reluctant to get too excited without data from the USDA. There is trade talk circulating that China bought 300,000 tonnes of US for Feb-Apr shipment. Export sales data from the USDA (when they return to work) could be large as they play catch-up on reporting.

Yield reports from corn harvest are much larger than most producers expected. This translates into traders being cautious on either side of the market.

Allendale has announced its 2014 Ag Leaders Conference Series! The entire event will be online, click for more information.

Many analysts have put together their balance sheets and are raising yields from September USDA estimates. A well respected analyst, Rich Feltes from RJ O’Brien is using 161 bushel per acre for corn yield to get near a 2.5 billion bushel carryover for 2013/14 corn. His soybean estimate is 42.5 bushels per acre with ending stocks at 205 million bushel for 2013/14 marketing year.

The index fund rolls could begin as early as next week. The large long positions in the nearby contracts could setup some volatility going into the roll period.

NOPA crush data was 108.68 versus trade expectations of 106 million bushel.

Corn futures have rallied up against the 20 day moving average in the December contract. A trade above the 4.46 level opens the door for a test of 4.50.

India may cut the floor price for wheat exports from government warehouses by 13%. This could give China another source for wheat purchases other than the US.

There was no clear reason for the sudden jump in hog futures yesterday. At one point the December contract was up a full 2.07. The market was able to hold most of those gains. Those are days where we would appreciate government data on cash hog, cash pork, or slaughter activity to see if there was a change in fundamentals. Chart resistance in the December contract crosses at 88.45 and then at 89.00. Support crosses at 86.00.

Most analysts are estimating a 2% to 4% increase in Placements for the month of September. Newswires will be releasing estimates ahead of what would have been the Friday Cattle on Feed report.

Call your Allendale Representative with question at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn    +1
  • Nov Beans   +6
  • Dec Wheat   +1 1/4
  • Dec Cattle  -.02
  • Dec Hogs    -.05
  • Dec Dlr     -.07
  • Dec S&P     +7.00
  • Nov Crude   +.14
  • Dec Gold    +8.10
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Will Kicking the Can Be The Solution?

Oct 15, 2013

Good Morning! Paul Georgy with early morning comments for October 15, 2013 at 4:45 am.  Grain futures are mixed with some spread unwinding in wheat and corn. Optimism that Washington will reach a resolution before the deadline is providing support for the US Dollar.

A weather system moving across the Midwest is slowing harvest for a few days but an extended dry period should follow. The northern half of cornbelt’s growing season will likely come to an end this weekend.

NOPA crush data will be released today at 11:00 am with trade expecting 106.4 million bushels crushed during September.

The weekly export inspections and shipments will be released later this morning. Normally this information would be reported on Monday’s but was delayed due to holiday.

Newswires continue to survey analysts to get a feeling of what USDA might release if they were working. Trade is estimating a 158+ corn yield now as harvest reports are running above expectations. One producer told us his corn is averaging 27 bushels above the best yield he ever produced.

Using a 158 yield plus a larger beginning stock number and the potential of reduced ethanol usage, it makes it easy to come up with 2013/14 corn ending stocks over 2.0 billion bushels.

A newswire survey has bean yields moving up to the 43 to 44 level again. This could raise ending stocks to above 150.

There has been more trade talk that China is buying beans from the US. Allendale’s Rich Nelson believes with a target of China importing 69 mmt of soybeans this year they will be aggressive in purchasing US beans due to last year’s logistics problems in South America.

China’s Ag Ministry says wheat seeding is down due to recent dry conditions.

Without daily slaughter data, traders must do their own math. Last week’s hog slaughter was likely around 2.2 million head. This week’s run may pick up another 25,000 to 50,000 head more. Although this may look like a large increase it is nowhere near the increase implied by the September Hogs and Pigs report.

Cattle news to watch for is the trade estimates for what would be the October Cattle on Feed Report which is due to be released Friday. The early talk is for placements to run 2% to 4% higher than last year.

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 4:45 AM

  • Dec Corn    +1 3/4
  • Nov Beans   + 1/4
  • Dec Wheat   -2 3/4
  • Dec Cattle  -.15
  • Dec Hogs    -.05
  • Dec Dlr     +.36
  • Dec S&P     +3.00
  • Nov Crude   -.53
  • Dec Gold    -19.80
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Harvest Progress Rolls On

Oct 14, 2013

Good Morning! Paul Georgy with early morning comments for October 14, 2013 at 5:00 am.  Grain futures are higher on short-covering after last week’s sell off. The equity markets are lower as hopes of a quick resolution in Washington wane.

The government shutdown continues with both sides digging in. When listening to some of the talk shows over the weekend it appears the debt ceiling issue is not enough to get all parties to sit down and work out a solution.

Of course, there will be no USDA numbers but trade is guessing soybean harvest is 35 to 40% complete compared to an average of 58%. Corn harvest is expected to be 25 to 30% done versus an average of 38%.

DeKalb County IL is reporting some huge soybean yields. Other bean harvest results are better than expected as well.

Tuesday at 11:00 am NOPA will release their September crush numbers, average trade estimate is 106.4 million bushels.

EPA said late on Friday that no final decision on 2014 RFS will be made without ‘full opportunity’ for all stakeholders to comment.

The forecast for the cornbelt has some showers moving across the area early this week then drier colder air moving in. There is a chance of frost for the northern half later this week, says weather forecaster John Dee. Temps could be the mid 30’s by Friday morning.

Argentina received better than expected rains over the weekend. Brazil continues to receive plenty of moisture. Wheat harvest in Brazil continues to battle poor quality.

Egypt’s GASC buying group says they canceled a wheat tender because of high prices, not financing problems.

The October Lean Hog contract goes off the board today.

There were 10 re-tenders against the October Live Cattle contracts with the date through September 17, 2013. Cash cattle traded at 128 on Friday which was 2.00 higher than last week.

Call your Allendale Representative with question at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn    + 1/2
  • Nov Beans   + 8
  • Dec Wheat   +1 1/4
  • Dec Cattle  Steady-Higher
  • Dec Hogs    Steady
  • Dec Dlr     -.06
  • Dec S&P     -12.25
  • Nov Crude   -.36
  • Dec Gold    +9.30
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Allenale Wake Up Call Oct 11

Oct 11, 2013

10/11/13

Good Morning! Paul is out of the office this week, celebrating his 40th anniversary. In place of his usual morning notes, Paul thought it would be a good idea to give our non-subscribers a taste of some of our other reports. Have a great week!

Corn 10/10/13: Once again the day session traders started today by moving in the opposite direction of the overnight trade. There was some early talk about potentially reducing the amount of ethanol produced by the mandate but follow up news was quick to disregard that talk right now. A difference today from the rest of the week is that…More Corn Comments

Harvest Special subscription pricing available until 10/15. Subscribe for 12 months for $250! Click Here!

Soybeans 10/10/13: Early today’s in the session we tested the weeks high but after failing to take the highs out the market sold back off. China announced that they will be auctioning off 500,000 tonnes of beans from the 2009 crop year this week and that added to today’s weakness. With an open weather window, harvest continues to pick up speed and that should help fill up the pipe line. The November/January spread has…More Bean Comments

Wheat 10/10/13: Analysts estimate the US winter wheat crop is now about 55-65% complete, which is right in line with the 5-year average.  However, there is still a lack of subsoil moisture in about 40% of the growing area and the areas will need rainfall to have a good quality crop.  US HRW yields were a record 46.8bu/acre for the 2013 crop…More Wheat Comments

Lean Hogs 10/10/13: During normal times the trade is able to evaluate cash hogs, cash pork, futures, and slaughter levels in order to gauge how well the market is dealing with various supply changes. In the initial days of the government shutdown the lack of information on three of those four categories was not too much of a problem as there was little new news to digest. Now we are seeing..More Hog Comments

Live Cattle 10/10/13: With bids posted at prices equal with last week’s $126 the trade now expects cash to trade at $127 tomorrow. That was good news, and prices did react today but it is not yet enough to justify…More Cattle Commentary

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn   -3 3/4
  • Nov Beans   -4 1/2
  • Dec Wheat   -1 1/4
  • Dec Cattle +.12
  • Dec Hogs   +.10
  • Dec Dlr     -1.42
  • Dec S&P     +1.25
  • Nov Crude   -1.26
  • Dec Gold    -1.15
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Allendale Wake Up Call 101013

Oct 10, 2013

10/10/13

Good Morning! Paul is out of the office this week, celebrating his 40th anniversary. In place of his usual morning notes, Paul thought it would be a good idea to give our non-subscribers a taste of some of our other reports. Have a great week!

Corn 10/9/13: Early this morning there was talk about the light showers expected this weekend causing harvest delays, more talk that China bought 450,000 tonnes of corn last week and also word that South American corn acres will be slightly lower. All of this just so happened to occur after the 440 short term support level was hit to offer another short term bounce to start the day. Once again it is easy for…More Corn Comments

Harvest Special subscription pricing available until 10/15. Subscribe for 12 months for $250! Click Here!

Soybeans 10/9/13: The soybean market put in a choppy session as volume remains low. We anticipate that this type of trade action will be the norm until the USDA is funded and starts issuing their normal reports. The October WASDE report was to be released on Friday and that has been delayed until an undetermined date. The early harvest results were reported to be "better than expected" and this put downward pressure to the market early in the harvest. Now it seems that…More Bean Comments

Wheat 10/9/13: Russia’s winter wheat sowings are now at 9.1 mln hectares, which is about half of intended area as of yesterday.  Last year’s sowings totaled 13.8 mln hectares at this time….More Wheat Comments

Lean Hogs 10/9/13: Yesterday we discussed the fact that hog slaughter is running under USDA’s Hogs and Pigs estimate. The September 1 to mid-October kill should be around 3.5% smaller than last year. It has actually run a large 6.9% under last year including this week. While this comparison with USDA’s pace is a very valid concern for us right now (bullish) we must also point out…More Hog Comments

Live Cattle 10/9/13: South Korea’s announcement that it had suspended beef purchases from one US beef plant may not have been the major issue here, but it added onto a growing discussion about demand. For the statistics, South Korea took only 7% of our exports in the most recent month available. Because this is a limited suspension, and only from one plant, we…More Cattle Commentary

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn   +2
  • Nov Beans   +9 1/4
  • Dec Wheat   +3 1/2
  • Dec Cattle -.02
  • Dec Hogs   -.02
  • Dec Dlr     +.94
  • Dec S&P     +14.75
  • Nov Crude   +.42
  • Dec Gold    -.84
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Allendale Wake Up Call 10-9-13

Oct 09, 2013

10/9/13

Good Morning! Paul is out of the office this week, celebrating his 40th anniversary. In place of his usual morning notes, Paul thought it would be a good idea to give our non-subscribers a taste of some of our other reports. Have a great week!

Corn 10/8/13: Yesterday saw some active fund short-covering which was met with a good amount of selling. Today the selling was here again but this time without the short-covering or the Chinese buying corn rumor. Sellers were quick to sell back the recent bounce but once this market was within 5 cents of contract lows there was solid support seen once again. Without significant news…More Corn Comments

Soybeans 10/8/13: A turnaround Tuesday dominated today’s trade action as new news to trade continues to be lacking due to the government shutdown. This had yesterday’s buyers becoming sellers today. After a wet weekend that slowed harvest to a crawl…More Bean Comments

Wheat 10/8/13: Weather forecasts suggest some drier weather for the Black Sea region in the forecast, which could result in a few extra hectares of 2014 wheat plantings. However, plantings will still be significantly lower than previously estimated…More Wheat Comments

Lean Hogs 10/8/13: Plugging in our estimates of this week’s kill levels, both weekdays and a 135,000 head run for Saturday, we still think the USDA survey is still not yet up to snuff. This week’s kill would run 4% lower than…More Hog Comments

Live Cattle 10/8/13: While we have heard some estimates of up to 100,000 head of losses from the heavy rains and snows this past weekend in the northwest Plains it looks as though a consensus estimate is around 60,000 head for South Dakota right now. This would represent a 1.5% death loss over South Dakota’s entire cattle herd (3.85 million head). For a nationwide total…More Cattle Commentary

Harvest Special subscription pricing available until 10/15. Subscribe for 12 months for $250! Click Here!

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn   +1/2
  • Nov Beans   -5 1/4
  • Dec Wheat   -2 1/4
  • Dec Cattle -.02
  • Dec Hogs   +.05
  • Dec Dlr     +2.68
  • Dec S&P     +5.00
  • Nov Crude   -.01
  • Dec Gold    -1.40
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Allendale Wake Up Call 10-8-13

Oct 08, 2013

10/8/13

Good Morning! Paul is out of the office this week, celebrating his 40th anniversary. In place of his usual morning notes, Paul thought it would be a good idea to give our non-subscribers a taste of some of our other reports. Have a great week!

Corn 10/7/13: More short covering was seen in corn today which offered a small bounce again. A key difference between today’s trade and the recent trade we have seen is that today showed very solid volume. This is a sign that for all contracts that short positions covered today was offset with quick selling. Yield reports continue to suggest that is the right course of action. If funds want…More Corn Comments

Soybeans 10/7/13: Beans put in anther choppy session as a lack of fresh news has the market acting erratically. It was officially announced today that the USDA will be delaying the release of the October crop report until an undetermined time. With the House, Senate and the White House digging in their heels, it looks like the budget mess will last for a while. The drop dead date to get a deal done is…More Bean Comments

Wheat 10/7/13: SovEcon has lowered its estimate for Russian wheat planting by almost 3.5 mln hectares to 13-13.5 mln hectares. As a result, Russia could lose up to 7.5 mmt of their wheat crop due to the excessive rainfall…More Wheat Comments

Lean Hogs 10/7/13: If USDA is right from their Hogs and Pigs report then a sharp ramp up in slaughter will be seen by the end of the month. This past Saturday the trade estimated a 55,000 head kill. The trade is estimating this coming Saturday will see 135,000. If USDA is right then…More Hog Comments

Live Cattle 10/7/13: Last week we looked at impact on cattle futures from the most recent extended government shutdown. Starting on December 5 of 1995 there was a 21 day shutdown which dropped the February contract 3.27%. A similar shutdown this year would put the December futures at 127.65. There was one more…More Cattle Commentary

Harvest Special subscription pricing available until 10/15. Subscribe for 12 months for $250! Click Here!

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn   UNCH
  • Nov Beans   +5 1/2
  • Dec Wheat   +4 1/4
  • Dec Cattle -.02
  • Dec Hogs   +.05
  • Dec Dlr     +.59
  • Dec S&P     -.75
  • Nov Crude   +.79
  • Dec Gold    -.16
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Wake Up Call 10-7-13

Oct 07, 2013

10/7/13

Good Morning! Paul is out of the office this week, celebrating his 40th anniversary. In place of his usual morning notes, Paul thought it would be a good idea to give our non-subscribers a taste of some of our other reports. Have a great week!

Corn 10/4/13: Once again a mainly calm trade was seen today with a little support found from an end of week buy back of shorts combined with a little rain. It is hard to get too excited about a turnaround yet with today’s bounce coming on the 2nd least amount of volume since December became the lead traded month. Trade is likely getting bored with the constant talk of better than expected yields. It isn’t that better yields are not bearish but we have been looking at that same news for over two weeks now.

Soybeans 10/4/13: The bean market generated a nice technical bounce to end the week.  News continues to be lacking with the government in a partial shutdown mode. This has kept trade volumes low so it does not take much to move the market in one direction or another. Informa did give the market some news to trade when they lowered their national bean estimate to 41.7 down from their previous estimate of 42.4. The latest USDA estimate was a 41.2 bushel crop. Informa put the total bean production at 3.176 billion bushels while the last USDA production estimate was 3.149 billion bushels. With the government closed it is looking more and more likely that the October WASDE will be delayed until an undetermined date.

Wheat 10/4/13: Statistics Canada estimates for Canadian wheat production came out as expected at 33 mmt for the 2013/14 wheat crop.  The news did not have a large effect on the markets. The wheat complex finished lower on the session due to profit taking before the weekend as speculators are getting out of the markets as there is no fresh news due to the government shutdown.

Lean Hogs 10/4/13: Though there is no government report to provide solid data we would guess this week’s cash hog trade fell by about $2. A hangover from last Friday’s Hogs and Pigs report is still being felt here. Don’t forget this is seasonally the time for cash markets and December futures to post a solid decline into late November.

Live Cattle 10/4/13: Futures started off lower Thursday night on the steady/lower Thursday afternoon cash sales. During the day session today though we saw bids move up to the $126.50. That really helped market opinion and the December and further back months posted new highs for this uptrend.

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn   UNCH
  • Nov Beans   -1 3/4
  • Dec Wheat   +2 1/2
  • Dec Cattle Stdy-Lwr
  • Dec Hogs   Stdy-Hghr
  • Dec Dlr     -1.30
  • Dec S&P     -15.25
  • Nov Crude   -1.12
  • Dec Gold    +.30
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Futures Traders Crave More Fundamental News

Oct 04, 2013

Good Morning! Paul Georgy with early morning comments for October 4, 2013 at 5:00 am.  Grain futures are mixed with corn and wheat slightly higher, soybeans slightly lower.

Markets are missing USDA data releases. The weekly export sales (Thursday morning), the CFTC Commitment of Traders Report (this afternoon), Crop conditions (Monday afternoon) and probably the Crop Production and Supply & Demand report (next Thursday) will be missed. Trading volume is deteriorating and the trading ranges will likely become narrower as the Government shutdown continues.

Traders are now convinced the shutdown will continue into the debt ceiling deadline on October 17th.

Soybean basis was steady to higher at the gulf as South American competition decreases going into early next year. China is still closed for the holiday.

Japan says they bought 118,456 tonnes of food quality wheat from US and Canada.

Stats Canada will release wheat production numbers later this morning as trade is expecting a number near 33 mmt.

River basis is firm as rain slows harvest in the Midwest.

Harvest yield results continue to come in with substantially better than expected results. It should be noted, however, that producers in South Central MN and North Central IA are starting harvest with less than average yields for corn and soybeans.

The Deutsche Bank roll is selling the Nov 13 and buying the Nov 14 soybeans. There are three more days to go in this roll and the Goldman roll will start on Monday and last through next week. They will be rolling long Nov 13 to long Jan 14.

Livestock futures trading volume has dried up. Traders are concerned about the settlement process for the October Lean Hog contract which goes off the board on Monday the 14th. Without the USDA cash hog data, the CME is unable to calculate the CME Hog index. With this uncertainty traders are reducing their position size to manage risk until USDA data comes back on line.

Watch for headlines to move markets and expect trading volume to trend lower until Washington gets back to work.

Call your Allendale Representative with questions at 800-262-7538.

Markets as of 5:00 AM

  • Dec Corn    + 3/4
  • Nov Beans   -4 1/2
  • Dec Wheat   +3 1/4
  • Dec Cattle  -.25
  • Dec Hogs    +.20
  • Dec Dlr     +.16
  • Dec S&P     +4.50
  • Nov Crude   +.28
  • Dec Gold    -2.00
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Standoff On the Hill Continues

Oct 03, 2013

Good Morning! Paul Georgy with early morning comments for October 3, 2013 at 5:00 am.  Grain futures are higher on short covering. Soybeans are finding support due to rain slowing down harvest.

The stalemate on getting the government back to work is having a significant impact on grain traders. Without USDA data, the harvest results from producers are getting the spotlight. More soybean yields are being reported as larger than expected while corn yields are still coming in at record levels.

The October 11th USDA Supply and Demand report is likely to be postponed until a later date as government employees are usually gathering data this week. Currently, data collection offices are dark.

Washington reporters are now expecting the government to be shut down for at least a 2 weeks.

Soybean bids have improved at processors ahead of the weather system moving across the cornbelt later this week. Corn basis is steady to weaker on harvest movement.

Stats Canada will be releasing their wheat production number tomorrow morning. Traders are expecting a large wheat number out of Canada.

There is talk that Eric Cantor may be appointed to the House Conference Committee on Farm Bill. This would suggest a major confrontation over the wide difference between the House and Senate’s approach to cuts of the Food Stamp Program.

Today’s USDA weekly export report will be delayed due to government shutdown. However trade analysts were expecting the following: Corn 500 to 700 tmt, soybeans 800 to 1,000 tmt, meal 150 to 300 tmt, soyoil 5 to 15 tmt and wheat 500 to 750 tmt.

Heavy rains in Ukraine are slowing planting of winter wheat and export shipments. This could be good for US wheat exports.

Chart of the Day

Lean hog traders at CME have been liquating their October positions as the CME works on a fair settlement formula. The lack of USDA hog values is limiting information to calculate a settlement value for October expiration on the 14th. The delivery process for the October live cattle contract should not be affected by the government shutdown. Cash cattle bids are 123 in the south with no offers from sellers.

Call 800-262-7538 or email your questions to service@allendale-inc.com

Markets as of 5:00 AM

  • Dec Corn    +1 3/4
  • Nov Beans   +7 1/4
  • Dec Wheat   +3 1/4
  • Dec Cattle  -.17
  • Dec Hogs    +.22
  • Dec Dlr     -.06
  • Dec S&P     -5.50
  • Nov Crude   -.28
  • Dec Gold    -10.70
 

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

What Should I Watch While USDA Is Closed?

Oct 02, 2013

Good Morning! Paul Georgy with early morning comments for October 2, 2013 at 5:00 am.  Grain futures are slightly lower in a quiet session.

Traders are dealing with harvest result news while anticipating what the USDA might change on next week’s supply and demand balance sheet. It is expected they will make an adjustment on planted/harvested acres for corn and soybeans. Early estimates from analysts are increasing yields from last month’s numbers. There also is a concern of whether or not the report will be released on Oct 11th at 11:00 or postponed due to the government shutdown.

Harvest results continue to amaze producers in eastern half of the Midwest. Corn yields continue to run 20 to 40 bushels more than expected with many reporting 200+ bushels per acre on average. Soybean yields are average to below average in the same area due to lack of late season rains.

The western cornbelt is getting average to above average yields on corn but are being surprised by soybean results. NW IA producers report 72 to 80 bushels per acre on soybeans. MN producers are getting larger yields than they were expecting in August.

Stats Canada will release their wheat production number on Friday morning.

Weather conditions in Argentina have producers holding on to old crop wheat supplies which has processors scrambling to buy near-term needs. Brazil wheat harvest quality has the importers looking for high food quality supplies around the world and especially from its neighbor to the south. Argentina wheat premiums have skyrocketed in recent weeks.

China remains on Golden Week Holiday until next Monday. The Goldman Roll begins early next week in the November contracts. Washington politics will impact markets as no data will be released and USDA has shutdown its website.

Smithfield said it will determine the price it pays for cash hogs based on USDA market hog prices from Sept 30 for each day until the government reopens through Oct 4. After Oct 4 they will evaluate market conditions and determine a fair value. The CME in a letter to customers said the Government shutdown could have an impact on cash settled contracts such as feeder cattle and lean hog futures.

Traders are turning to technical indicators for direction as fundamental news is limited. December hog chart is showing a potential double top formation which would be confirmed on a close below 85.90. The downside target would project to near the 83.00.

December live cattle have support at 131.00 and remains in an uptrend. Call 800-262-7538 or email your questions to service@allendale-inc.com.

Markets as of 5:00 AM

  • Dec Corn    -3 1/4
  • Nov Beans   -1 3/4
  • Dec Wheat   -1 3/4
  • Oct Cattle  -.02
  • Oct Hogs    +.07
  • Dec Dlr     -.05
  • Dec S&P     -13.00
  • Nov Crude   -.41
  • Dec Gold    +5.90
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

How Will Markets Deal With Government Shutdown?

Oct 01, 2013

Good Morning! Paul Georgy with early morning comments for October 1, 2013 at 5:00 am.  Grain futures are lower as traders deal with the US Government shutdown.

Weather conditions should allow for harvest to pick up over the next few days until another system moves through the Midwest late this week. The USDA says only 12% of the corn is harvested compared to 23% average. Only 11% of the soybeans are harvested, compared to 20% average. Crop conditions report showed an improvement of 3% to 53% in G/E category for soybeans. Corn was unchanged from last week at 50% G/E.

The USDA surprised the trade by putting corn quarterly stocks for the 2012/13 marketing year at 824 million bushels compared to the trade estimate of 681. Without any adjustments for yield or harvested acreage this data would suggest ending stocks for the 2013/14 marketing year will be near 2.0 billion bushel.

Soybean stocks were 16 million bushel higher than trade was estimating due to USDA increasing last year’s production by 19 million bushel.

Traders are combining this news with harvest reports of larger than expected yields to provide selling pressure. A close in November futures below 12.80 would point to the 12.25 level as the next downside target.

The wheat stocks number was friendly compared to trade expectations. It appears feed usage of wheat replaced high corn prices during July and August.

Heavy rains in parts of Ukraine and eastern Russia are slowing winter crop seeding.

China is expected to be quiet as they celebrate their Golden Week Holiday which starts today and runs through Oct 7th.

Non-farm payroll data comes out on Friday and the Goldman Roll starts next Monday in soybeans.

The October WASDE report is only 10 days away. Trade will be honing in on the acreage changes and yield adjustments the USDA may make on the upcoming report. The release of this report, however, is being overshadowed by the government shutdown.

Livestock traders are shocked that the USDA made no adjustments for PED virus and only a had slight increase in herd expansion. Lean hog futures are testing support levels which are key to maintaining uptrend. December futures have support at 85.90. Pork cutout values were down .04 on Monday.

Cattle traders are concerned about demand as we go forward with the shutdown although beef cutout values were higher with choice up .62 and select up 1.46. The CME Feeder Index was up .26 to 159.63.

Markets as of 5:00 AM

  • Dec Corn    – 1/4
  • Nov Beans   -10
  • Sep Wheat   -1 3/4
  • Oct Cattle  -.40
  • Oct Hogs    -.37
  • Dec Dlr     -.15
  • Dec S&P     +7.50
  • Nov Crude   -.17
  • Dec Gold    +4.80
Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Log In or Sign Up to comment

COMMENTS

 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions