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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.

Crop Insurance May Not Save All Producers

Aug 17, 2012

Good Morning! Paul Georgy with early morning comments for August 17, 2012 at 5:00 am. Grain futures are mixed in a narrow trading range overnight. The weather forecast is cooler with chance of showers for next 10 days. We realize that will not change corn dramatically but will slow the dry down hopefully add a bit more quality. Soybeans should benefit from the moisture and cooler temps. Futures markets have been quiet this week as traders deal with the transition from a focus on supply to a focus on demand deterioration. Corn, beans and wheat are now cheaper for export in other countries than in the US. Many have commented that the farmer will be saved this year by crop insurance. We have looked at the data from RMA that shows only 65% of the planted acres of corn are covered by Revenue Protection insurance with the majority of those acres covered by the 75% or less plan. There are a total of approximately 76 million acres covered by some type of crop insurance plan. We are hearing stories of farmers already advising landlords that they were not going to get paid for rent this year. We are also hearing of producers without a crop and without crop insurance preparing for bankruptcy. It might be time to analyze the bushels you have sold and the bushels your crop insurance protects and lock in some revenue. Ex: 180 APH X 75% RP insurance X 8.00 Dec futures = $1080 per acre revenue. Talk to your Allendale Rep to help you with calculations and strategies for your operation. The USDA will be releasing the cattle on feed report this afternoon. Trade is looking for a decrease in July placements. However with the drought spreading west during July, pasture conditions may have forced more cattle to the feed yards. Boxed beef was higher again on Thursday with choice up .96 and select up 1.16. While pork cutout values were down .88. Sign up for the Allendale Ag Leaders Webinar on August 28.
Markets as of 5:00 AM
Dec Corn    -1 1/4
Nov Beans   +8 1/2
Sep Wheat   +7
Oct Cattle -.15
Oct Hogs    +.52
Sep S&P     -1.00
Sep Dlr     -.02
Sep Crude   -.45
Dec Gold    -.20
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Contact us directly view email: research@allendale-inc.com
Allendale Advanced Charts
Yesterday’s close in Dec Wheat is what is classified as a "throwback" day. A throwback day in when we trade back inside of the formation that we broke out of in this case a triangle formation. We have violated the 7/24 pivot low of $8.64 ¼ which we were using as our level to place bearish/priced decisions. However based on yesterday’s rejection of the downside breakout we must revert to a neutral position in the Wheat in fear of continued whipsaw risk…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Strategie Grains, an EU based analysis firm, lowered its expectation for EU corn production sharply, from 65.2 million tonnes to 58.1. They see problems for the Eastern areas such as Hungary, Romania, and the Czech Republic. This is even lower than USDA which on Friday lowered their EU production estimate from 65.5 to 61.5 mt.
Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.

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COMMENTS (2 Comments)

sorry: insurance was NOT Free
8:19 AM Aug 20th
Most guys i know take 70 or 75% coverage with some of them taking the spring price. So if your 5 year ave was 130 bu corn and you 70% cover then you get 91 bu. so if your corn makes 70 you get 21 bu x $6.00 or $126. To add to the problem most of listened to the hype of $4 corn come harvest time last spring so we sold 30 to 50 bu to the acre. let us not forget the isnurance was free. Not every farm has 190 bu dry land corn
8:17 AM Aug 20th
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