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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.

Bargain Hunters Try Picking a Bottom

Jul 16, 2014

Good Morning! Paul Georgy with early morning comments for July 16, 2014 at 5:30 am CDT.

Grain futures are higher on bargain hunting and short covering. Technical indicators are oversold and an unexpected bounce is possible at any time.

8:00 AM Update - Morning Coffee Commentary:

Allendale’s weather model was run earlier this month and returned a crop yield of 167.8 bpa.

Given the much cooler than normal temperatures this week it will return a higher number when run before next week’s Allendale web conference. The AgLeaders Conference will be run on July 22 – 24. Brought to you on your own computer, signup is now available via our website.

Our North Dakota branch office is reporting that most cash bids for fall delivered corn now has a 2 in front of the price. We are hearing Midwest producers are moving some old crop corn as they are concerned about basis getting wider. Our Minnesota customers are surprised how quickly the corn has caught up and much of the corn is beginning to tassel at a normal time.

The battle between production bulls and those who think it is too early to believe the yield could be near or over 170 is beginning. We will hear a lot more talk from each side before the August USDA report.

Bargain hunters are stepping in and buying corn and soybeans. However it is believed rallies are made to be sold at least until we find a reason for a significant yield loss.

NOPA pegs June soybean crush at 118.7 mil bushel vs. 128.8 million bushel in May and 119.5 million bushel the trade was expecting.

Janet Yellen the Federal Reserve Chairwoman signaled in her semiannual report to Congress on Tuesday, that the U.S. economic recovery is "not yet complete" and too many Americans remain unemployed which makes it necessary to continue with low interest rates.

EIA report expected to show another decline in crude oil inventories.

The EU Leaders will discuss further sanctions against Russia in a meeting today.

As we see the effect of PEDv in the current slaughter mix, we must also point out the seasonality of hog slaughter during the summer. Typically the lowest non-holiday kill week is either the second or third week of June. Slaughter levels then generally stay low through the third week of July. Then numbers begin their build into the heavy November/December peak. This year may be a tougher one to guess due to the effect of PEDv. Pork Cutout values are up .33.

There is talk that some cash cattle may trade at 154 this week $1.00 to $2.00 lower than last week. After seeing august futures sharp decline over the last week only a $2.00 decline could be seen as a victory. Beef values are weaker with choice down .61 and select down .96. The CME Feeder index is 216.77.

Markets as of 5:30 AM CDT          

  • Sep Corn   +5       
  • Aug Beans   +7 1/2
  • Sep Wheat   +3 1/2
  • Aug Cattle  -.15    
  • Aug Hogs    +.02
  • Sep Dlr     +.14
  • Sep S&P     +5.50
  • Aug Crude   +.76
  • Aug Gold   +1.50

Chart of the Day

daily chart

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