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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.

Bean Basis Has A Sharp Drop

May 23, 2013

Good Morning! Paul Georgy with early morning comments for May 23, 2013 at 5:00 am.  Grains are mixed on position evening and profit taking ahead of the long weekend. The PMI data out of China overnight has equity markets and base commodities under pressure this morning. Traders will be dealing with mixed signals in the grain complex as the holiday weekend approaches. An opposite directional move of the cash markets versus futures yesterday has traders scratching their heads. Futures rocketed through recent highs and closed strong in both corn and soybeans. Cash basis, on the other hand, dropped sharply. There were reports late yesterday that elevator basis for soybeans fell 20 to 28 cents per bushel. This suggests farmers are moving enough grain to fill end-users needs. The news that ethanol production was down only 5.2% from last year when USDA is forecasting a 10% decline and the announcement that China and unknown buyers purchased 540,000 tonnes of new crop corn is providing some support under the market this morning. Funds were estimated net buyers of 12,000 corn, 2,000 wheat and 7,000 soybean contracts yesterday. The farm bill is still in limbo in the senate. There is a lot of talk about the risk of having nearly 50% of the corn crop planted in a 10 day period which projects pollination to occur in late July. Historically temps could be very hot during that period. You can get a professionals opinion on Tuesday evening when Rich Nelson, Allendale’s’ Chief Strategist, and Matt Hubsch, an agronomist from Legend Seeds, will discuss potential issues in corn production. Sign up today for the Allendale Ag Leaders webinar on Tuesday night at 8 pm. Of course it is free.

Trade Estimates for USDA Weekly Export Sales – RTRS
  2012/13 2013/14
  Estimates Estimates
Corn 100-200 tmt 100-300 tmt
Soybeans 0-100 tmt 350-450 tmt
Wheat 0-200 tmt 300-400 tmt
Soymean 0-100 tmt 50-100 tmt
Soyoil 0-15 tmt 0 tmt

Boxed beef was mixed on Wednesday afternoon. However, choice set new highs again at 211.20 up .54. Select was down .78. The Feeder Index was unchanged at 131.53. Cash cattle are reported trading in TX at 124 which is 1.00 lower than last week. Packer margins have improved greatly due to higher wholesale beef prices.  Packers have a short week next week and don’t need as many cattle giving them the upper hand. Pork stocks in cold storage grew by 51 million lbs. last month. Wednesday’s number of 698.816 million lbs. is a new record of any month! The previous high was April 2008’s 663. Pork cutout value was up .65 to 94.34.

Markets as of 5:00 AM

  • Jul #Corn    -3 1/2
  • Jul #Beans   + 3/4
  • Jul #Wheat   +4 1/2
  • Jun #Cattle  +.10
  • Jun #Hogs    -.17
  • Jun Dlr     -.46
  • Jun S&P     -19.00
  • Jul Crude   -1.25
  • Jun Gold    +16.90


View Today’s Chart of the Day

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