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March 2014 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.
 

What Will USDA Tell Us At Eleven?

Mar 31, 2014

Good Morning! Paul Georgy with early morning comments for March 31, 2014 at 4:35 am.  

Grain futures are mixed in quiet overnight trade. The next few hours will give traders a chance to adjust positions before the USDA Quarterly Stocks and Prospective Plantings report at 11:00. Going into today’s session, funds have added to net long positions and corn prices at the CBOT have increased more than 11 cents last week. One would have to assume the trade is positioned for a friendly report.

Trade estimates gathered by Reuters for Quarterly Stock are:

                                          Wheat     Corn    Soybeans
Average trade estimate       1.042    7.099      0.989
Highest trade estimate        1.115    7.540      1.087
Lowest trade estimate         0.985    6.861      0.955

Estimates for the Prospective Planting are:

                                                Corn    Soybean           All      Winter    Spring      Durum
                                                                                   Wheat   Wheat     Other       
Average trade estimate          92.748    81.075        56.277      42.157    12.270      1.794
Highest trade estimate           94.000    83.600        57.711      44.000    13.500      2.200
Lowest trade estimate            90.500   78.500         54.800      41.800    11.000      1.390

Managed Money Funds added 11,427 contracts to long positions in corn last week for a total of 239,287 contracts. They reduced net long soybeans by 13,243 and added 12,456 contracts to long positions in wheat.

Brazilian lawmakers have shot down market rumors of an export tax on oilseeds. They scrapped a proposal to change taxes on soy sales from a bill on taxation of Brazilian companies abroad.

After today’s USDA reports, traders will be focused on the Russian/Ukraine situation and the Chinese economy. Weather conditions and forecasts will also become headline market movers again. Stay in touch by following Ryan Martin, Allendale’s Meteorologist by clicking here.

The Hog and Pigs Report was a shock to many traders as the USDA reduced the hog herd by only 3.3% while the average trade guess was a 5.5% reduction. The recent price rally might suggest professional traders were looking for more than the average decline. Early calls are expecting hog futures to open sharply lower to limit down at 9:05 this morning. Pork cutout values were up .57 on Friday.

Due to the expected weakness in Lean Hog futures, Live Cattle are called lower as well. Packers paid up last week but many are thinking they will be pulling contracts early in April. Beef product has been under pressure causing packer margin to narrow. Beef values closed out the week sharply lower with choice down 4.79 and select down 3.87. The CME Feeder Index is 178.55.

Markets as of 4:35 AM

  • May Corn    -2 1/4
  • May Beans   +1 1/2
  • May Wheat   -5 1/2
  • Apr Cattle  Lower
  • Apr Hogs    Lower
  • Jun Dlr     -.01
  • Jun S&P     +6.00
  • May Crude   -.03
  • Apr Gold    +.20

Chart of the Day

Daily Chart

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 USDA Help With Actual Hog Count?

Mar 28, 2014

Good Morning! Paul Georgy with early morning comments for March 28, 2014 at 4:35 am.  

Grain futures are mixed with corn and wheat lower, soybeans higher.

The next two trading sessions should see position adjusting as we go into the release of key USDA reports. This afternoon, the Quarterly Hogs and Pigs Report will be watched closely by grain and livestock traders. On Monday the USDA will release Quarterly Stocks and the Prospective Planting for corn and soybeans.

The Hogs and Pigs report could have an impact on corn usage for the second and third quarters as well as provide traders with some real data on PEDv effect on hog supplies.

Quarterly Stocks report is the amount of grain available on March 1st. The USDA contacts over 84,000 farm operators and 8,800 commercial operations and ask for supplies on hand as March 1. Listen to the March Allendale Ag Leaders Webinar, later today, which has the interview with Lance Honig, USDA Crops Branch Chief.

The wheat market is in the middle of a weather market as the southern plains remains very dry. A forecast for any rain in the southern plains will likely have a huge impact on wheat prices at the CME.

Reuters – U.S. energy markets cannot absorb the levels of biofuels required by law to be blended into the fuel supply in 2014, Environmental Protection Agency head Gina McCarthy said on Thursday, defending a controversial proposal to slash the target for this year.

Analysts estimates for Hog and Pig Report to be released at 2:00 pm today. 

                                      Ranges     Average     Mln head 
All hogs March          92.0-97.1        94.5       61.493
Kept for breeding      98.9-100.7       99.6         5.813
Kept for market        91.2-96.9          94.0       55.683

Summer months of lean hog futures are preparing for significant reductions in hog supplies. The cash hog index and the nearby April futures contract have move to near even. Pork cutout values are down 1.16 on Thursday.

Cash cattle traded mostly $2.00 higher early this week. Futures are trading well below the cash price which is providing underlining support for the April contract. Cattle traders will be keeping a close eye on the report this afternoon. Beef cutout values were lower with choice is down 2.51 and select is down 2.10. The CME Feeder Index is 177.98.

Call your Allendale Representative to discuss last minute position adjustments going into these critical reports. Expect volatility on Monday.

Markets as of 4:35 AM

  • May Corn    -2 1/4
  • May Beans   +3 1/4
  • May Wheat   -7 1/2
  • Apr Cattle  -.12
  • Apr Hogs    +1.25
  • Jun Dlr     +.11
  • Jun S&P     +6.00
  • May Crude   +.35
  • Apr Gold    +1.20

Chart of the Day

Daily Chart

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

Profit Taking Seen In Soybeans

Mar 27, 2014

Good Morning! Paul Georgy with early morning comments for March 27, 2014 at 4:35 am.  

Grain futures are lower on profit taking ahead of major reports to be released over the next few days.

Attend the Monthly Allendale Ag Leaders Webinar this evening at 7:00 pm as we will discuss the upcoming USDA Prospective Plantings and Grain Stocks Report with a USDA representative. (Register Here)

Weather has become a big concern to traders as we approach planting season in the Midwest.

Ryan Martin, Allendale’s Meteorologist and Branch Manager says, "The focus now shifts to moisture and away from cold air, as the pattern should show moderation of temperatures through the next week." You can read the full comments by clicking here.

The weekly export sales data will be out at 7:30 AM. Reuter’s survey of traders is as follows:

                         Trade estimates          Trade estimates
                             for 2013/14                for 2014/15
Wheat             325,000-475,000           50,000-250,000
Corn               525,000-725,000                     0-200,000
Soybeans        100,000-250,000          300,000-500,000
Soymeal          100,000-200,000         100,000-200,000
Soyoil                         0-50,000                      0-10,000

USDA attaché in Brazil is estimating the Brazilian corn crop for 2013/14 at 72 mmt versus last USDA estimate of 70 mmt.

Talk is now circulating that the cargoes of soybeans recently cancelled by China are less than expected last week. Maybe we will get a confirmation soon.

Livestock traders are adjusting positions ahead of the Quarterly Hog and Pigs Report tomorrow afternoon. The USDA should provide some indication of the impact of PEDv on this report. High volatility is expected going into this report. The pork cutout value is up .52.

Firmer cash cattle prices this week have futures traders buying the discount with April contract $6.00 to $7.00 under cash. Beef cutout values are mixed with choice up .51 and select down 1.14. The CME Feeder Index is 177.18.

Markets as of 4:35 AM

  • May Corn    -1 1/4
  • May Beans   -4 1/4
  • May Wheat   -4  
  • Apr Cattle  -.02
  • Apr Hogs    +.80
  • Jun Dlr     +.09
  • Jun S&P     +4.50
  • May Crude   -.09
  • Apr Gold    -7.70

Chart of the Day

Daily Chart

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

The Calm Before The USDA Storm on Monday

Mar 26, 2014

Good Morning! Steve Georgy with early morning comments for March 26, 2014 at 4:35 am.  

Grains are slightly mixed this morning with very light trade. 

Catch Up on Meteorologist Ryan Martin’s Weather Updates

Volume continues to be light as we approach the big report at the end of the month. If you look back at the last 5 years, the one thing we can say is that we will see volatility on Monday.  New crop corn has seen an average of 20 ½ cents in either direction whereas beans have been plus or minus 36 ½ cents. Old crop contracts have seen much more in the way of movement. Informa came out with projections yesterday and really didn’t get the market to react much. Corn projections were at 93.029 and beans at 81.204. The average trade guess is 93.014 for corn and 81.162 for beans. Allendale’s farmer based survey has bean acres over 83 million and just over 92 million for corn. 

We continue to hear talks of Chinese crushers reselling cargoes of Brazilian beans to the US for April-July shipments and could be as many as 8-10 cargoes. Oil World has projected South American beans at 151.45 MMT vs. previous estimate of 150.6 MMT. 

Hogs finished limit down yesterday as weak long positions were taking profits. PED findings fell for the second week and it seems like we have seen the worst for now. The Hog and Pigs report on Friday will be very important to see if we can get bullish numbers to keep the trend up. There is a big fund position that has pushed into the hogs and could cause a sharp reaction lower if they decide to come out. Cutout values were down .25 cents to 131.39.

Cattle closed unchanged yesterday with box beef up .13 cents for choice and down 1.48 for select. There was some light trade in Kansas at 150. Cattle are finding support this morning but will we see cash trade higher this week and break the 150.50 record high that we have hit 3 times before?

Markets as of 4:35 AM

  • May Corn    -1/2
  • May Beans   -3 1/2
  • May Wheat   + 1/2     
  • Apr Cattle  +1.17
  • Apr Hogs    -.05
  • Jun Dlr     +.11
  • Jun S&P     +3.00
  • May Crude   +.15
  • Apr Gold    +3.50

Chart of the Day

Daily Chart

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

Early Morning Profit Taking Starts the Day a Little Weaker

Mar 25, 2014

Good Morning! Steve Georgy with early morning comments for March 25, 2014 at 4:35 am.  

Grains are finding some profit taking after a strong finish yesterday. 

The Ukraine and Russian tensions continue to escalate as Wheat and corn find more support from the unknown. It is unclear as to how the acreage situation could play out this year in that region. The major growing areas around the Black Sea region start planting corn in April and May and wait a little longer for wheat. Is this situation potentially more bullish for corn instead of wheat? We know wheat has seen more strength from this over the last several weeks as corn continues to fight the domestic battles of having a big carryout number.

Planting intentions report as well as quarterly stock number will be released next Monday and could be the primary focus as we move though this week. Most analysts are projecting corn acres to be around 92 million acres but we feel the quarterly stock numbers may come in bearish due to the "feed and residual" category. USDA may have to come clean about the significant increase in feed stock usage for the first quarter. Our biggest concern for this report will be bean acres. Most analysts are projecting 83 million acres or better. That is a record amount of acres and could put next year’s carryout near 400 million with trendline yields. Beans have found strength the last few weeks but it is hard for us to imagine continued strength as we get close to this report.

We continue to hear that cargoes of Brazilian beans continue to be pointed in our direction and could see more shipments as the spread between US beans and Brazilian beans continue to widen. 

Cattle once again managed to fade the Cattle on Feed report that was out last Friday. We are coming into a timeframe where we typically see cattle prices decline coming into summer due to the increase in slaughter numbers. The cash markets are strong but box beef continues to climb and keep strength in this market as well. Choice was up .96 with select up 2.27 yesterday.

There was profit taking in the hog market as we saw the PED number drop for a second week. As temperatures warm up it seems it is helping to control this virus for now. Cutout values were up .14 yesterday to 131.64. 

Markets as of 4:35 AM

  • May Corn    -2 1/2
  • May Beans   -5 1/2
  • May Wheat   -5 1/4     
  • Apr Cattle  -.15
  • Apr Hogs    -1.60
  • Jun Dlr     +.11
  • Jun S&P     +3.25
  • May Crude   +.26
  • Apr Gold    +3.60

Chart of the Day

Daily Chart

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

Countdown Begins To USDA Reports

Mar 24, 2014

Good Morning! Paul Georgy with early morning comments for March 24, 2014 at 4:35 am.  

Grain futures are higher due to lack of fresh news stories. The week ahead should provide for some volatile markets.

Grain traders are looking for confirmation of soybeans cargoes switched from Brazil to the US. Late in the week we were getting talk of 10 or more cargoes being imported on the East Coast.

Catch up on Meteorologist Ryan Martin’s daily weather forecast

Headlines will be a market mover ahead of the USDA reports next Monday.

Informa will release their planting estimates on Tuesday.

The CFTC report showed managed money increasing long positions in corn by 18,299, soybeans by 6,024 and wheat by 13,521.

I attended the "Exchange of Ideas" Conference and R J O’Brien’s 100 Years in business celebration over the weekend. They had analysts present on several key topics affecting the agricultural markets. We also got to talk with other industry leaders about the future of agricultural. The bottom line was they were friendly on outlooks but suggested we should be prepared for some very volatile price swings.

The macro markets will be watching the Ukraine situation as we wait to see if Russia will announce retaliatory sanctions to those levied by the U.S. and Europe late last week and whether Russia will move its military into eastern Ukraine. President Obama has a busy week as he will be in The Hague for a 20 nation summit on how to curb nuclear proliferation.  He will also attend a G7 summit designed to forge a response to Russia’s military takeover of Crimea and will attend a US-EU summit in Brussels.  Later in the week, Mr. Obama will meet with Pope Francis at the Vatican. Watch for comments and headlines that will move the market.

The Cattle on Feed report was a little bearish for the late summer/early fall period. Placements of calves and feeders entering the feedlots were 14.7% over last year. This was above the average guess of a 9.2% increase. February placed cattle are marketed as fats from July through early October. This will weigh on the June and August contracts on the opening. Marketing’s ran 3.4% under last year. This was pretty close to the average guess of -3.3%. We don’t see too much of a problem on Monday’s open for the April contract. Early calls are lower to slightly lower. Beef cutout values are lower with choice down 1.41 and select down 1.11. The CME Feeder Index is 173.93.

PEDv and herd rebuilding is the driver on the supply side of the balance sheet. Consumer demand is being watched closely for indication that prices are too high. Pork cutout values were up .24 on Friday. Call the hogs mixed on the opening.

Markets as of 4:35 AM

  • May Corn    +6 3/4
  • May Beans   +18
  • May Wheat   +10 1/2    
  • Apr Cattle  Steady-Lower
  • Apr Hogs    Steady-Lower
  • Jun Dlr     +.15
  • Jun S&P     +3.50
  • May Crude   +.14
  • Apr Gold    -10.20

Chart of the Day

Daily Chart

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 Are Funds Going To Do Next?

Mar 21, 2014

What Are Funds Going To Do Next?

Good Morning! Paul Georgy with early morning comments for March 21, 2014 at 4:45 am.  

Grain futures are mixed with profit taking in soybeans. Technical traders will be feeding off the reversal chart patterns made on Thursday.

Click Here for Allendale’s Daily Weather Update from Meteorologist Ryan Martin

The USDA released big sales again on the Weekly Export report. However that was offset by talk of more cancellation, switching or washouts of China’s previously purchased soybeans from Brazil. The trade is concerned that as many as 20 cargoes of Brazilian soybeans are at risk that China may walk away from.

The Peoples Bank of China has taken an interest in the soybean situation as they are concerned about some of the loans they regulate. The AG Banks are suggesting a reduction in government stocks of grains and soyoil. This action is continuing to pressure crush margins.

NOAA said at their Spring Outlook Meeting that Midwest corn planting could be delayed due to slow thaw.

University of Illinois economist Scott Irwin in a recent Farm Doc Daily post, "Recent Trends in the Profitability of Ethanol Production" says the ethanol industry has seen four extended periods of plant profitability, with the most recent one being the longest one, starting in spring 2013 to the present.

The Live Cattle futures chart picture looks a bit ominous after yesterday’s trade. The nearby futures contracts now have a double top made by an outside day down. Bulls will need to negate this pattern within a few days or more technical selling could persist.

Cash cattle traded yesterday afternoon at 150 in TX and NE which would be lower than last week. Cattle traders will be adjusting positions ahead of the Cattle-on-Feed Report this afternoon at 2:00 pm. Beef values are lower with choice down 1.80 and select down 1.53. The CME Feeder Index is 174.02.

Fund selling in livestock futures did not miss the lean hog futures. Most contracts closed near session lows. Confirmed cases of Porcine Epidemic Diarrhea Virus increased by 296 in the week ended March 15, bringing the total number to 4,757, according to data released on Thursday by the U.S. Department of Agriculture’s National Animal Health Laboratory Network.  Pork cutout values are up .63.

Markets as of 4:45 AM

  • May Corn    + 1/4
  • May Beans   -17
  • May Wheat   +1
  • Apr Cattle  +.22
  • Apr Hogs    +.85
  • Jun Dlr     -.11
  • Jun S&P     +4.75
  • May Crude   +.13
  • Apr Gold    +6.70

Chart of the Day

Daily Chart

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

World Soybean Movement Sends Signal

Mar 20, 2014

World Soybean Movement Sends Signal

Good Morning! Paul Georgy with early morning comments for March 20, 2014 at 4:35 am.  

Grain futures are mixed with corn and wheat lower while soybeans are higher.

The wheat market has been the volume leader at the CME as money flow triggers buy stops and breaking of key technical resistant points. The heating up of the situation between Ukraine and Russia seems to be the underlying catalyst.

The news in soybeans would be considered negative under most circumstances. Several cargoes of soybeans have been loaded in Brazil and on their way to the US. There has been confirmation of 5 and rumors of as many as 7 more switched from China to the US.

The USDA in its latest forecast has Chinese soybean imports to be 69 mmt. The forecast from a large Chinese crusher puts imports at 63 mmt.

The USDA’s Foreign Ag Service attaché forecast Brazil’s soybean crop to 88.0 mmt compared to USDA March estimate of 88.5 mmt.

Funds were estimate to have bought 11,000 wheat contracts and 6,000 soybean contracts on Wednesday. They were even on corn.

Elevators along the Ohio River said there were many pricing inquiries by wheat farmers. Corn and soybean basis improved slightly as farmer selling has come to a standstill.

NOAA will be hosting a media teleconference this morning to discuss their spring outlook. Traders will be watching for details starting at 10:00 am.

USDA’s weekly Export sales report will be released at 7:30. Trade estimates as gathered by Reuters News:

                        Trade estimates                Trade estimates
                             for 2013/14                       for 2014/15
Wheat              250,000-500,000            50,000-200,000
Corn                400,000-700,000           100,000-350,000
Soybeans        -100,000-300,000          300,000-600,000
Soymeal           100,000-200,000           30,000-100,000
Soyoil                          0-50,000                      0-50,000

Doane Advisory Service released their estimates for planted acres in 2014. Their forecast is for 90.9 million acres of corn and 83.6 million acres of soybeans. Allendale numbers were 92.2 million acres of corn and 83.3 million acres of soybeans.

Trade estimates for March 1 cattle in feedlots are expected to be down 1.2 percent from last year. February placements are expected to be up 9.2 percent and marketing’s are seen down 3.3 percent. The report will be released tomorrow at 2:00 pm. Beef values are lower with choice down .71 and select down .92. The CME Feeder Index is 173.55.

 Market ready hog supplies are very tight due to PEDv and producers holding back breeding stock is adding to the problem. Pork cutout values are up .27.

Markets as of 4:35 AM

  • May Corn    -3 1/4
  • May Beans   +4
  • May Wheat   -5
  • Apr Cattle  +.02
  • Apr Hogs    +.67
  • Jun Dlr     +.10
  • Jun S&P     -1.50
  • Apr Crude   -.27
  • Apr Gold    -13.30

Chart of the Day

Daily Chart

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

Money Flow Drives Soybeans

Mar 19, 2014

Good Morning! Paul Georgy with early morning comments for March 19, 2014 at 5:00 am.  

Grain futures are mixed with soybeans higher; corn and wheat are lower. The upcoming quarterly stocks report seems to be providing the fuel as money flow buys soybeans.

Grain traders are struggling to find solid reasons for the strength in soybeans and grains in recent sessions. The trade is talking about cancellations by China, the possibility of several cargoes of soybeans from Brazil going to the East Coast of the US without a confirmation.  

The bottom line, money flow by funds was the driver yesterday. They are back as buyers overnight.

Putin using the vote by Crimea to take it back by force is creating nervousness but appears to be a long process before any conclusion. Russia now has another port to export to the world.

Conflicting reports on Ukraine’s spring seed crops will continue to provide support for corn and wheat.

There are reports this morning that China has booked 2 more cargoes of corn out of Ukraine.

US Planting Intention reports are only a few weeks away. If tension eases or news stories get old, traders will turn to the upcoming USDA Report for influence.

Cash grain market buyers raised bids while basis bids were weaker after the rally in board prices. Funds were net buyers of 7,000 wheat contracts, 6,000 corn and 9,000 soybean contracts.

EIA stocks are due to be released at 9:30 today.

Macro markets are waiting for Fed Chairman Yellen’s comments after the FOMC meeting this afternoon.

Pork cutout values were up 3.48 on Tuesday. Cash hog markets continue to strengthen as packers look for market ready hog supplies. Pork producers are telling us that gilts and sows are being bred at an unbelievable pace. This hold back of breeding stock is compounding the current tight supply situation.

The USDA will release the March 1 Cattle-on-Feed Report Friday. Cash trade is expected to be steady this week. The discount of futures to cash and the unending rally in pork is supporting live cattle futures. Beef cutout values are higher with choice up 1.21 and select up 1.13. The CME Feeder Index is 173.67.

Markets as of 5:00 AM

  • May Corn    -1 3/4
  • May Beans   +16
  • May Wheat   -4
  • Apr Cattle  -.05
  • Apr Hogs    +.65
  • Jun Dlr     +.09
  • Jun S&P     +1.75
  • Apr Crude   -.09
  • Apr Gold    -11.00

Chart of the Day

Daily Chart

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

Winter Wheat Conditions Decline

Mar 18, 2014

Good Morning! Paul Georgy with early morning comments for March 18, 2014 at 4:30 am.  

Grain futures are higher on concerns about increasing tension between Ukraine and Russia. Crop conditions declining in major wheat growing states in the US is also providing support. Old crop soybean usage continues to provide support to old crop/new crop spreads.

USDA’s Situation Paper on Ukraine last week suggested everything is alright. Yesterday an analyst group in Ukraine stated that it expects as much as 20% of land may not get planted because of lack of funding for inputs.

Hard Red Winter Wheat ratings dropped in KS, OK, and TX. Dry soil conditions and cold temperatures caused TX good/excellent to drop from 28% to 13%.

Rich Nelson, Allendale’s Chief Strategist says the recent rally has added $86.00 per acre for corn and $52.00 per acre for soybeans. Can this change the planted acreage estimate by USDA on March 31st?

Rich gave us the price projections based on Allendale’s Planting Survey results at the weekly broker meeting. You can listen in by clicking here. Take a one week free trial of the site to view.

NOPA Crush data put year to date crush at .04% higher than last year when USDA’s target is an increase of .01% increase.

Clearing the Argentinian port of the ship blocking soybean shipments is likely to take until Wednesday. Dock workers are threatening to go on strike later this month if the pay raise is not met.

Farmer selling has come to a standstill as basis held steady in most areas. Gulf demand showed some weakness late on Monday.

FOMC meeting results will be released tomorrow. The macro market is waiting for the release of the CPI, Housing Starts and Real Earnings at 7:30 this morning.

Total supplies of beef, pork and poultry in 2014 are the lowest since 1991. Packers are reducing chain time at many cattle and hog plants this week. Pork cutout values were up 2.13. Beef cutout values were mixed with choice up 2.41 and select down .44. The CME Feeder index is 173.73.

Markets as of 4:30 AM

  • May Corn    +3
  • May Beans   +9
  • May Wheat   +4 1/4
  • Apr Cattle  +,22
  • Apr Hogs    +1.30
  • Jun Dlr     +.04
  • Jun S&P     -3.75
  • Apr Crude   +.27
  • Apr Gold    -8.80

Chart of the Day

Daily Chart

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

Soybeans Coming Into US?

Mar 17, 2014

Good Morning! Paul Georgy with early morning comments for March 17, 2014 at 4:40 am.  

Grain futures are lower. Wheat is getting support from increased tension in the Crimea region. Corn and Soybeans are under pressure on talk of China reducing state own reserves.

Traders and analysts will be fine tuning their estimates for the USDA Quarterly Stocks and Prospective Plantings reports which will be released on March 31.

Corn planting is underway in LA. We also received a report that there was AgriGold Seed corn being planted in Arkansas.

Have you seen Allendale’s Daily Weather Update from in house Meteorologist, Ryan Martin? Click Here

There is talk of 2 to 3 cargoes of Brazilian soybeans being diverted to Eastern US ports.

NOPA will give us their February crush data at 11:00 this morning. Trade average estimate is 140.9 million bushel.

The CFTC Commitment of Traders report showed Managed Money Funds increasing long positions in corn by 51,439 to be net long 209,561 contracts. In soybeans they reduced net long positions by 15,845 and in wheat they added 16,555 long positions to now be net long 10,515 contracts.

A group of Senators are urging the CFTC to finalize the new position limits rule. The lawmakers wrote ""The speculation rule has been held up over the last several years, which has allowed speculators to continue driving up the price or increasing the price volatility of these important commodities."

Outside markets will be watching for a change in policy when the FOMC releases the minutes of this month’s meeting on Wednesday.

Smithfield suspended slaughter on Friday at one of their North Carolina plants due to tight supply of hogs. Pork cutout values were up 3.28 on Friday.

Cattle on Feed and Cold Storage reports will be released on Friday at 2:00 pm. Cash cattle traded steady to higher last week. Beef values were lower with choice down .86 and select down .37. The CME feeder index is 173.88. Livestock futures could open steady to lower on some early week profit taking.

Markets as of 4:40 AM

  • May Corn    -7 1/4
  • May Beans   -7 1/2
  • May Wheat   -2 1/4
  • Apr Cattle  Steady-Lower
  • Apr Hogs    Steady-lower
  • Mar Dlr     +.02
  • Mar S&P     +10.00
  • Apr Crude   -.11
  • Apr Gold    +.00

Chart of the Day

Daily Chart

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 To Watch As A Volatile Week Comes To End

Mar 14, 2014

Good Morning! Paul Georgy with early morning comments for March 14, 2014 at 4:50 am.  

Grain futures are lower as traders even up some positions. The elections and political positioning in Crimea this weekend is adding uncertainty.

Allendale releases the planting survey results. Farmers say they will plant 92.349 million acres of corn and 83.212 million acres of soybeans. Corn planting intentions at 92.349 million acres would be the fourth largest since 1944 when 94.473 million acres were planted. Using Allendale Inc.’s estimate of harvested acreage and our 163.06 bushel/acre trend yield, it would imply the second largest production of 13.781 billion bushels. Last year’s production was 13.925 billion bushels.   

Soybean intentions of 83.212 million acres would be record plantings. Using Allendale Inc.’s estimate of harvested acreage and our 44.29 bushel per acre trend yield, it would imply production of 3.639 billion bushels and a new all-time record high. Last year’s production was 3.289 billion bushels.

For more information regarding Allendale’s 25th Annual Planted Acreage Survey, click here.

Other market concerns this morning are: Argentina’s largest grain exporting port in Rosario had a ship run aground and will block the channel for up to a week. This comes at a time when new crop corn and soybeans will be harvested and ready for export.

Brazil’s major soybean port has 20% less ships in line to load this year compared to last year. Less corn to ship this year has soybean shipments moving at a much faster pace as reason for this year’s efficiency.

NOPA crush data will be released on Monday at 11:00 am. Trade will be using this information to calculate tightness in quarterly stocks.

March grain and oilseed contracts stop trading today at 12 noon.

US gulf basis for corn weakened because South America offers a better value for exporters. Soybean basis drifts lower as China is quiet and talk continues to suggest they want to resell some of the previous purchases.

Outside markets will be preparing for Ms. Yellen’s leadership at next week’s FOMC meeting. They are also concerned about China’s economy and the vote this weekend in Crimea.

Reports from our producer clients are telling us about the death loss of baby pigs and other talk about finishing barns sitting empty. US Senators are requesting a disaster declaration for small pork producers due to the PEDv losses. The deadly virus has now spread to 27 states. Pork cutout values were up .87 to 121.47.

Packer margins are several dollars in the black and feedlot managers are holding out for steady to higher prices this week. Beef values are mixed with choice down .21 and select up .11. The CME Feeder Index is 173.60. Live Cattle futures are being supported by the discount to cash and the rally in lean hog futures.

Markets as of 4:50 AM

  • May Corn    -3
  • May Beans   -8
  • May Wheat   -2
  • Apr Cattle  +.47
  • Apr Hogs    +.15
  • Mar Dlr     -.10
  • Mar S&P     +3.00
  • Apr Crude   +.09
  • Apr Gold    +.90

Chart of the Day

Daily Chart

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

Spreading Dominates Trading Volume

Mar 13, 2014

2014 Planted Acreage Survey Results

Good Morning! Paul Georgy with early morning comments for March 13, 2014 at 4:50 am.  

Grain futures are mostly higher, led by wheat. The political crisis in Ukraine and the dryness affecting US winter wheat production is providing support.

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Liquidation of the old crop/new crop soybean spread has provided some pressure to the May and July soybean contracts.

There has been more talk of China canceling or trying to resell soybeans from Brazil, no confirmation. Port watchers in Brazil are seeing a shift to corn loading which suggests some of this chatter may be true. This could create competition for US corn over the next several weeks.

The CME announced the implementation of Variable Price Limits for grain and oilseed futures and the elimination of price limits on grain and oilseed options. The rule will become effective May 1 upon CFTC pending approval.

USDA released a special report on Ukraine grain production yesterday afternoon. You can get the report by clicking on here.

The USDA Weekly Export Sales data will be released at 7:30 this morning. Trade estimates from a survey done by Reuters News:

                                For 2013/14                     For 2014/15
Wheat             350,000-550,000                     0-200,000
Corn               650,000-900,000          100,000-250,000
Soybeans        125,000-400,000          175,000-350,000
Soymeal         100,000-200,000                      0-100,000
Soyoil                    0-30,000                                0-10,000

Ethanol production for the week ending March 7 averaged 869,000 barrels per day. This is down 2.80% vs. last week and up 9.03% vs. last year.

Last trading day for March grain and oilseed contracts is tomorrow at CME.

Hog producers are in the driver’s seat as hog supplies are tight. The question is "How high is too high for futures?" When will retailers resist the high pork prices? Pork cutout values were up 3.07 on Wednesday.

Beef values were mixed with choice up .04 and select down .95. There has been no trade in the cash yet this week. The CME Feeder Index is 173.70. The April live cattle futures are currently $4.00 to $5.00 under last week’s cash prices. Feedlots are still looking for higher prices this week.

Markets as of 4:50 AM

  • May Corn    +3 3/4
  • May Beans   + 1/2
  • May Wheat   +8
  • Apr Cattle  +.22
  • Apr Hogs    +.42
  • Mar Dlr     -.28
  • Mar S&P     +4.75
  • Apr Crude   -.08
  • Apr Gold    +2.80

Chart of the Day

Daily Chart

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

Bulls Need To Be Fed

Mar 12, 2014

Good Morning! Paul Georgy with early morning comments for March 12, 2014 at 4:30 am.  

Grain futures are lower, led by long liquidation in soybeans triggered by fundamental news and a weak chart pattern.

There has been more talk of China rolling or cancelling soybean contracts out of Brazil and US. Crush margins in China continue to deteriorate. Crush margins in the US continue to back off with meal values on the defensive.

Farmer selling has stopped after the recent price rally however they have picked up moving grain as weather permits.

As we look ahead, the Ukraine/ Russia situation is continuing to provide support to grain futures. Traders will be waiting for the export sales numbers tomorrow morning.

The results of the Allendale Annual Planting Survey will be released tomorrow morning at 7:30. Thanks to all who shared their information to make this year’s survey a success.

Last trading day for the March CBOT grain and soy contracts is Friday March 14.

Ukraine’s Ag Minister says it is unlikely that most of Crimea will not plant spring crops due to turmoil in the area.

Rosario Grain Exchange in Argentina pegs their soybean crop at 54.7 mmt compared to a last estimate of 55 mmt. The corn crop is seen at 22.7 mmt compared to a last estimate of 22 mmt.

Brazil’s agency similar to USDA will release their estimate of the 2013/2014 Brazilian soybean crop. Most estimates are now in the 87 to 88 mmt range, down from the 90 to 91 mmt level.

Mato Grosso’s Safrina corn (second crop) is about 75% planted which is behind normal.

Wheat challenged the 200 day moving average but was unable to close above it in the May contract. Soybeans fell below chart support which suggests more long liquidation could be in the making. The May contract in corn used the 200 day average as support and closed above 4.78 on Tuesday.

Have you seen Allendale’s daily weather updates from in house Meteorologist, Ryan Martin? Click Here

Cash hog and product markets remain strong on fear of pending tight meat supplies. Pork cutout values are up 2.59 to 117.53. Lean hog futures are under pressure this morning as the recent sharp rally is leading to some profit taking.

Beef values are higher with choice up 2.57 and select is up 1.72. Packer margins are again in the black and feedlots are looking for firmer cash trade this week. CME Feeder Index is 173.56.

Markets as of 4:30 AM

  • May Corn    -4
  • May Beans   -26
  • May Wheat   -4
  • Apr Cattle  +.25
  • Apr Hogs    -1.57
  • Mar Dlr     +.06
  • Mar S&P     -2.75
  • Apr Crude   -1.44
  • Apr Gold    +8.30

Chart of the Day

Daily Chart

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

USDA Report Provides No Surprises

Mar 11, 2014

Good Morning! Paul Georgy with early morning comments for March 11, 2014 at 4:30 am.  

Grain futures are mixed with corn and soybeans lower and wheat higher.

The results of the Allendale Annual Planting Survey will be released Thursday morning at 7:30. Thanks to all who shared their information to make this year’s survey a success.

Rich Nelson has provided a breakdown of yesterday’s USDA report when clicking here.

Now that the March USDA report is out of the way, trade will begin to focus on the March 31st Quarterly Stocks and Prospective Plantings report. Allendale is expecting usage to be down in the second quarter which could mean an increase in corn ending stock by 200 to 300 million bushels.

NASS said the wheat crop good/excellent ratings improved in TX and KS while OK fell by 9% from last week.

Weather conditions have improved across the Midwest which is providing opportunity for farmers to move grain. Corn and soybean basis was lower yesterday afternoon.

Reuters is reporting that Syngenta AG is halting commercial sales of GMO Duracade in Canada because the product lacks approval in China.

There is talk that China may have cancelled up to 15 cargoes of soybeans out of Brazil. The question remains when will they cancel US purchases due to the back up of soybeans in China’s ports.

Funds are estimated to have sold a net 14,000 corn contracts, 6,000 wheat contracts and 12,000 soybeans contracts on Monday.

Chart watchers are now talking of possible seasonal tops in the grain futures. The May contract of corn has fallen back under the 200 day moving average. Soybeans and wheat are near support levels that, if broken, may cause long liquidation. Stay in touch with your Allendale Broker.

Can hog prices equal cattle values? This past weekend there were pork researchers suggesting summer hog supplies could be down as much as 12 to 15% from a year ago during summer months due to PEDv. When combining the loss of pork, beef and poultry production in yesterday’s USDA production report, it suggests meat supplies will be tight for several month. Lean hog futures continue to rise on tight supply concerns and fund and spec buying. Pork cutout values are up 2.95 to 114.94.

Beef values continue to strengthen which helps to improve packer margins and stabilize fed cattle values. Market ready supplies remain tight however as fed cattle numbers should increase going into June as suggested by recent Cattle-on-Feed Reports. Beef cutout was sharply higher on Monday with choice up 2.88 and select up 3.12. CME Feeder Index is 173.34.

Markets as of 4:30 AM

  • May Corn    -1 3/4
  • May Beans   -5 1/4
  • May Wheat   +2 1/2
  • Apr Cattle  +.225
  • Apr Hogs    +1.15
  • Mar Dlr     +.08
  • Mar S&P     -1.75
  • Apr Crude   +.33
  • Apr Gold    +6.60

Chart of the Day

Daily Chart

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

Markets Finding Pressure Before the Supply and Demand Numbers at 11:00 cst

Mar 10, 2014

Markets finding pressure before the Supply and Demand numbers at 11:00 cst

Good Morning! Steve Georgy with early morning comments for March 10, 2014 at 4:30 am.  

View today’s weather outlook from Allendale’s in house Meteorologist, Ryan Martin.

After seeing corn start higher Friday and end toward the lower end of the range, we are seeing more profit taking ahead of the USDA report this morning. May corn had almost a 40 cent range last week and most was to the upside. December had a range of 22 cents but closed 12 cents higher on the week. This strong rally has put most producers profitable again and could see hedge pressure from sales being made at these levels. The market is expecting to see a very slight increase in ending stocks for corn but more eyes will be on beans.

The expectation is to see a 9 million bushel drop in ending stocks due to strong export demand. It seems everyone has been expecting to see more sales canceled from China but we just haven’t up to this point. South America will still be looking at a big crop even if we see their production number slip. They are still having port problems and that makes our beans more desirable. We need to keep a watchful eye for more cancellations this week but USDA may have to make some changes to the balance sheet if we don’t see these soon.

Wheat was strong Friday and could have a good chance to find strength again as tensions continue to build between Ukraine and Russia. This situation doesn’t seem like we are seeing any progress and this could have the funds come out of more short positions. We are not saying that the funds will go long but they could buy back short positions and that could be enough for more of a bounce. This report may not have a big impact on wheat so traders could focus on this situation as something to trade. 

Cattle finished higher on Friday but still finished the week almost 3.50 lower. Cash cattle traded $2 lower but box beef continued to climb. Choice finished the week .44 higher with select falling .13. We could see more pressure this week if cash markets continue to weaken.

Hogs were strong all week as fund money continues to pour into the summer months. Wholesale pork prices finished higher once again continuing the impressive streak it has been on. Cutouts were up $1.85 putting them at 111.99. This rally should find good support on pullbacks until we get some news to change this trend. 

Markets as of 4:30 AM

  • May Corn    -9 3/4
  • May Beans   -7 1/2
  • May Wheat   -8 1/2  
  • Apr Cattle  Steady 
  • Apr Hogs    Steady to lower
  • Mar Dlr     +.02
  • Mar S&P     -1
  • Apr Crude   -1.33
  • Apr Gold    -3.00

Chart of the Day

Daily Chart

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

Strong Exports Surge Grains Higher, Will China Cancel?

Mar 07, 2014

Good Morning! Steve Georgy with early morning comments for March 7, 2014 at 4:30 am.  

Grain futures are pushing higher this morning after a strong close yesterday. Strong exports in front of a USDA report Monday has kept traders hitting the buy button for now.

View today’s weather outlook from Allendale’s in house Meteorologist, Ryan Martin.

Exports yesterday pushed corn, beans and wheat higher with total sales surpassing all expectations. The market is still watching for cancellations every morning but we have seen very little. This is the time of the year that we see a shift in buying.

USDA will release new Supply and Demand numbers on Monday and due to strong exports for beans some analysts are suggesting that we should see exports increase by 6%. The average trade guess for beans is 141 million. That is a 9 million bushel decrease from last month’s numbers. The average guess for corn is 7 million bushels higher that last month’s. We will have to wait and see if this will have much market impact at this time. We could see more weight on the acreage numbers and quarterly stock figures at the end of the month.

The charts are still friendly and as of this morning May corn has taken out the long term down trend. Beans have pushed into new highs and were successful in making new highs overnight. 

Cattle could find some support from these levels now that the market has adjusted to the $2 drop in cash this week. That was disappointing but box beef continues to climb. Choice was up another 1.07 yesterday with select was up 1.07 as well. Hogs are still adding to an already impressive price move. With the expectation to see some of these tighter supplies due to PED showing up and the seasonal slow down in slaughter, this market is seeing the perfect storm for price. Will this last or will we see an impressive sell off if USDA doesn’t recognize this decline? Wholesale pork prices rose another 1.09 to 110.14. 

Allendale Annual Planted Acreage Survey is going right now. There is only a few days left to participate. Please call us at 800-262-7538 or go to www.allendale-inc.com and fill out the survey.

Markets as of 4:30 AM

  • May Corn    +8 3/4
  • May Beans   +21
  • May Wheat   +9 1/2 
  • Apr Cattle  unch
  • Apr Hogs    +.85
  • Mar Dlr     -.10
  • Mar S&P     +1
  • Apr Crude   +.02
  • Apr Gold    -3.00

Chart of the Day

Daily Chart

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 We See Profit Taking Before the USDA Report?

Mar 06, 2014

Good Morning! Paul Georgy with early morning comments for March 6, 2014 at 4:30 am.  

Grain futures are mixed with oilseed traders watching export data. Corn and wheat are lower as large ending stocks provide pressure.

View today’s weather outlook from Allendale’s in house Meteorologist, Ryan Martin.

There is a lot written about the Ukraine – Russia situation and the importance of grain movement out those countries in the World Grain Trade. The hope is the problem will be resolved in diplomatic ways but no one knows what Putin is really up too. The uncertainty of grain shipments out of that region is providing support to US gulf values for corn and wheat.

China’s cancellation of soybeans gave traders a little bit of news they have been expecting for some time. There has been more talk of China’s meal demand slowing due to bird flu in poultry flocks and the reduction of their hog herds. Old crop soybean demand is still strong. With half the marketing year left, our traditional buyers are expected to need beans from US.

The weekly export sales data due to be released this morning could be a key market mover. Watch for more cancellations in soybeans. Trade estimates gathered by Reuters are:

                               For 2013/14                  For 2014/15
Wheat              250,000-450,000          100,000-200,000
Corn               600,000-850,000                0-200,000
Soybeans           450,000-750,000          300,000-450,000
Soymeal             75,000-150,000           75,000-150,000
Soyoil                    0-30,000                               0

Ethanol production last week was 894 thousand barrels per day. This was down from last week but production is running about 11% above year ago levels. The USDA is estimating about a 7% increase year over year.

Truck drivers in the Port of Vancouver are threatening to go on strike at noon today. This could further compound the delays already seen at that port.

Funds were estimated to have sold a net 9,000 corn and 1,000 wheat contracts on Wednesday. They were even on soybeans.

The outside markets are going to be watching the Jobless Claims report this morning and the Unemployment data tomorrow morning.

A few cash cattle traded today in KS at $148 while a small number of cattle traded at $240 in NE on a carcass basis. The futures market is not for the faint of heart with April cattle contract having a $4.20 range yesterday. The large outside day trading range could trigger more selling today if Wednesday’s low (142.62) is taken out. Beef values remain strong with choice up 2.75 and select up 2.19. The CME Feeder Index is 172.21.

The Lean Hog futures are "crazy" for lack of a better word. Locked limit up and synthetic values were another $3.00 higher in the June contract early in the session yesterday. Floor traders said all of the sudden the buy orders disappeared and the market dropped like a rock. The concern about cash hog supply shortages beginning as soon as Mid-March has commercials aggressively buying hogs. Pork cutout values are up 1.51.

Allendale Annual Planted Acreage Survey is going right now. There is only a few days left to participate. Please call us at 800-262-7538 or go to www.allendale-inc.com and fill out the survey.

Markets as of 4:30 AM

  • May Corn    -3
  • May Beans   +5
  • May Wheat   -5 3/4
  • Apr Cattle  -.25
  • Apr Hogs    +1.40
  • Mar Dlr     +.02
  • Mar S&P     +2.75
  • Apr Crude   -.17
  • Apr Gold    -5.70

Chart of the Day

Daily Chart

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

Markets Wait For Another Round Of Money Flow

Mar 05, 2014

Good Morning! Paul Georgy with early morning comments for March 5, 2014 at 4:30 am.  

Grain futures are quiet as they wait for another round of money flow into commodities.

Funds continue to pour money in to Ag commodities as uncertainty in Ukraine’s ability to delivery on exports of wheat and corn looms over markets.

Momentum and trend following funds were huge buyers yesterday. Today will be the third day of their buying frenzy.

The Ukraine situation is still a very sensitive spot for world exports. As of now, Putin says he sees no need to move into Ukraine other than protecting his forces in Crimea. High frequency traders are watching headlines for direction.

The March USDA report will be released Monday at 11:00 AM. Rich Nelson, Allendale’s Chief Strategist has shared his thoughts on upcoming USDA Report: Corn – we only see an increase in exports. However we suggest when USDA revisits feed use numbers in April that ending stocks will be increased. We see Argentina corn production at 24 million tonnes (USDA 24 mmt) and Brazil corn at 69 (USDA’s 70 mmt). Soybeans – Only a minor decline in stocks is expected. Argentina soybean production is our estimate at 54 million tonnes (USDA 54.0 mmt) and Brazil is at 88 mmt (USDA 90 mmt). Wheat – A slight increase in stocks is expected. We question USDA’s current export number.

Informa estimates Brazil corn production at 65.45 mmt down 1.1 mmt from last guess. They also reduced Brazil soybean production by 900 tmt and Argentine soybeans by 3.0 mmt.

Ryan Martin, Allendale Advisory’s Meteorologist is looking for a strong system moving into the Midwest region in the latter half of next week with half to 1 inch water potential, and then 2 more systems/fronts between the end of next week and the 20th. This will lead to total moisture in the .5 to 1.5" range, coverage at 70%. Temperatures swings will get wilder over the second half of the month. Get the full forecast at Morning Weather Headlines.

On Tuesday, May corn closed above the 200 day moving average while the Dec contract has resistance at 4.92. May wheat closed above the 100 day average with the 200 day crossing at 6.66 today.

Lean hog futures are continuing their rally as cash markets try to keep up. Packers are aggressively looking for inventory. This week slaughter is approximately 40,000 head less than last week. Pork cutout values were up 1.27.

Cattle futures are strengthening as they try to catch up with cash. It is expected the South could trade at steady to firm prices this week. Packer margins are still in the red although beef values continue to work higher. Beef cutout values are higher with choice up 2.65 and select up 1.93. The CME Feeder Index is 171.98.

Allendale Annual Planted Acreage Survey is going right now. There is only a few days left to participate. Please call us at 800-262-7538 or go to www.allendale-inc.com and fill out the survey.

Markets as of 4:30 AM

  • May Corn    -1 1/4
  • May Beans   – 1/2
  • May Wheat   + 1/4
  • Apr Cattle  +.27
  • Apr Hogs    +.92
  • Mar Dlr     +.06
  • Mar S&P     -1.00
  • Apr Crude   -.37
  • Apr Gold    -3.40

Chart of the Day

Daily Chart

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 Putin Pull Back?

Mar 04, 2014

Good Morning! Paul Georgy with early morning comments for March 4, 2014 at 4:30 am.  

Grain futures are mixed with profit taking in corn and wheat while soybeans are being supported by tight supply concerns.

Allendale Annual Planted Acreage Survey is going on right now. There are only a few days left to participate. Please call us at 800-262-7538 or go to www.allendale-inc.com and fill out the survey.

The unrest between Ukraine and Russia is overshadowing any US news at this time. Reports out of the region suggest ships are still being loaded in Ukrainian ports. With Russia troops moving into Crimea, one has to assume there will be some disruption of loading or movement of grain at the ports. Get more insight on this matter by subscribing to the Allendale Advisory Report.

As of a week ago, Ukraine has approximately 4 mmt of corn and 2.7 mmt of wheat that is sold and not yet shipped.

The US Senate Foreign Relations Committee Chairman is suggesting the committee is working on ways to provide $1 billion in loans to the Ukraine economy.

More analysts in Brazil are lowering their estimates for the soybean crop. Safras lowered Brazil soybeans to 86.5 mmt while USDA is at 89 mmt.

Allendale is excited to introduce Ryan Martin as our in-house Meteorologist! Ryan will post his daily weather headlines every morning. Take a look!

Crop ratings for wheat out of the key hard red winter wheat states showed a decline in good/excellent category. OK was down 5% to 31%, NE down 3% and KS was down 1%.

Informa is expected to releases their estimates for next Monday’s USDA report today at 10:30.

Funds bought an estimated 20,000 contracts of corn, 18,000 contracts of wheat and 5,000 contracts of soybeans on Monday.

Soybean export shipments were disappointing. Traders are still waiting for cancellation or switching to South America. Export interest for corn at the gulf picked up due to concerns over Ukraine.

The April lean hog futures now have climbed to $12.50 premium to the cash hog index. Packers are more aggressive about buying hogs as a jump in bids by $2.00 yesterday found packers still wanting more inventories at the end of the day. Pork cutout values were up 1.16 on Monday.

Beef values were higher again with choice up 3.79 and select up 4.69. The improvement in cutout will help packer margins and could keep fed cattle steady this week. Spreading has been a feature in the livestock complex in recent days. Call your Allendale broker about the cattle spread; seasonal studies suggest they should be entered today.

Markets as of 4:30 AM

  • May Corn    -2
  • May Beans   +3 3/4
  • May Wheat   -3 1/2
  • Apr Cattle  -.02
  • Apr Hogs    -.55
  • Mar Dlr     -.06
  • Mar S&P     +13.00
  • Apr Crude   -1.14
  • Apr Gold    -10.60

Chart of the Day

Daily Chart

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

Political Unrest Sends Markets Higher

Mar 03, 2014

Good Morning! Paul Georgy with early morning comments for March 3, 2014 at 4:45 am.  

Grain futures are sharply higher. The tension between Russia and Ukraine has traders concerned that exports out of the Black Sea Region will be disrupted. Weather conditions in Mato Grosso and lack of cancellation confirmation is providing fuel for the buying.

Allendale Annual Planted Acreage Survey is going on right now. There is only 5 days left to participate. Please call us or go to www.allendale-inc.com and fill out the survey.

The 2014 crop insurance prices are set and the soybean to corn ratio is just below 2.50 to 1 which we have not seen since 2008. Now that we have flipped the calendar to March, planted acreage estimates will become very import. Given acreage coming out of CRP and the prevent plant acres of last year, many are expecting more than the 78.5 million acres of soybeans that USDA had in their Ag Outlook.

Managed Money Funds increased their long positions in corn and soybeans by 42,264 and 7504 contracts respectively. They also decreased short positions in wheat by 14,091 contracts and still hold a net short position of 20,311 contracts.

Soybean sales and shipments are being monitored closely by the trade. Currently the US has 7.4 mmt of unshipped soybeans. There is approximately 3.3 mmt sold to China which is nearly double from last year.

Allendale is excited to introduce Ryan Martin as our in-house Meteorologist! Ryan will post his daily weather headlines every morning. Take a look!

The $12 rally in cash hogs over the past two weeks suggests packers are pretty much chasing after every single hog they can find. They want to get enough numbers lined up before market ready numbers fall off the PED cliff. Pork cutout value is up 2.21.

Cattle slaughter was the tightest during third week of February with 539,000 head. Last week slaughter ran 567,000 head. Rich Nelson, Allendale’s Chief Strategist, believes slaughter could be up to 590,000 by the end of April and around 650,000 for June peak. Beef cutout values end the week on a firm note with choice up 3.92 and select up 4.12. The CME Feeder Index is 171.03. Early calls for the livestock opening would be steady higher.

Markets as of 4:45 AM

May Corn    +17 3/4
May Beans   +20 3/4
May Wheat   +3 1/2
Apr Cattle  Steady-Higher
Apr Hogs    Steady-Higher
Mar Dlr     +.12
Mar S&P     -17.00
Apr Crude   +1.45
Apr Gold    +23.60

Chart of the Day

Daily Chart

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

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