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The Allendale Wake-Up Call

RSS By: Paul Georgy,

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.

Allendale Sees Corn Production Rise

Jan 06, 2014

Good Morning! Paul Georgy with early morning comments for January 6, 2014 at 4:45 am.  

Grain futures are higher on short covering and anticipation of fund rebalancing.

Artic weather and possible winter kill for wheat is also providing support to grain futures overnight although snow cover should provide protection for winter wheat.

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Cash grain movement will be limited early this week as producers dig out from under snow fall and deal will extreme cold throughout the Midwest.

Basis levels have seen a slight improvement as some end-users need inventory. Barge movement on the Illinois River and upper Mississippi will be at a standstill due to ice.

DDG values have dropped to levels that are causing competition for soymeal. The cancellation of DDGs by China has pressure on prices in the US.

Allendale releases their estimates for Friday’s USDA Reports. Rich Nelson is increasing corn production by 94 million bushel to 14.083 billion bushel another new record. He sees soybean production dropping slightly to 3.251 billion bushel.

South American weather remains a negative to the market as hot temps move in and out as it would during a normal summer.

Brazil’s new crop harvest has begun and the premium of Jan over March futures should entice immediate movement.

The CFTC Commitment of Traders will be released this afternoon. Traders are waiting for the Index Funds to balance positions in early January. This report could give an indication whether or not they have started adjusting positions.

Livestock are being stressed due to extreme cold conditions throughout central US. Movement of product will be disrupted for a few days. Cash cattle are expected to trade steady to higher this week. Beef cutout values are higher with choice up 1.86 and select up 1.33. The CME Feeder Index is 169.47.

Pork product continues to struggle as chicken is creating competition at the retail counter. Cash hogs should be higher early this week but producers will struggle to move them. Pork cutout values down 1.21. Calls would have to be steady to higher on the open.

Markets as of 4:45 AM

  • Mar Corn    +1 3/4
  • Jan Beans   +1
  • Mar Wheat   +2
  • Feb Cattle  Steady-Higher
  • Feb Hogs    Steady-Higher
  • Mar Dlr     -.06
  • Mar S&P     +1.50
  • Feb Crude   +.50
  • Feb Gold    -1.10

Chart of the Day


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