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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.

Did We Sell More Old Crop Beans Last week?

May 30, 2014

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

Grain futures are lower. Wheat is set to close out the month with the largest loss in 3 years due to easing geo-political concerns. Planting progress and good weather prospects weigh on corn and beans.

The main region of weather concerns in the world is Russia where their major growing districts are getting dry. Most of the weather models have been fairly consistent in forecasting continued dryness for this region of the world. The GFS model may be inconsistent with rains (puts them in one run then takes them out the next). The Euro and Canadian models have been a lot more consistent with the dryness.

Traders are struggling with old crop bean supply tightness in the US. However the export market spreads are again suggesting South American soybeans will work in the US. Rallies in July futures are also creating more problems in getting letters of credit for Chinese importers 

The Chinese have a long weekend coming up and are closed on Monday for their Dragon Boat Festival.

USDA will be releasing weekly export sales at 7:30. The follow estimates are accumulated by Reuters.

                          Trade estimates            Trade estimates
                            for 2013/14                   for 2014/15
Corn               300,000-500,000          150,000-350,000
Soybeans    (-100,000)-100,000          500,000-700,000
Soymeal           50,000-150,000          100,000-200,000
Soyoil                         0-25,000                      0-10,000
Wheat                         0-200,000         200,000-400,000

Ethanol production remains very strong, as has been seen in recent weeks. Producers have strong margins so we should expect this pace to continue for a while. At current pace one would have expect USDA will have to raise ethanol usage on the supply and demand balance sheet.

Year to date ethanol production totals comparison are impressive. That will moderate in the coming weeks as the comparison against last year slips. Keep in mind last year had a surge in production at this time.

Argentina’s Congress on Wednesday eliminated local taxes on biodiesel in a bid to help an industry hit hard by the European Union’s anti-dumping measures. Biodiesel exports from Argentina are expected to plunge this year by as much as 39 percent due to tariffs imposed by the EU.

As we wrap up the month of May, hog producers around the nation are in the process of figuring up their June 1 totals for the June Hogs and Pigs report that will be released on June 27.

(Reuters) – Russia said on Thursday that it was suspending pig imports from the United States due to concerns about outbreaks of the deadly porcine epidemic diarrhea virus (PEDv).

Pork cutout value is 1.50 lower.

May cattle slaughter levels are running 5 to 7% below last year number. According to previous placement figures we should be only 3% below last year. The difference has to be attributed cattle being fed longer and heavier due to high cost of feeder cattle replacements. Beef values are weaker with choice down .66 and select down .38. The CME feeder Index is 191.75.

Markets as of 4:30 AM CDT          

  • Jul Corn    – 1/4
  • Jul Beans   -3
  • Jul Wheat   -1 1/2
  • Jun Cattle  +.22
  • Jun Hogs    -.25
  • Jun Dlr     -.06
  • Jun S&P     -2.00
  • Jul Crude   -.43
  • Jun Gold    -2.50

 Chart of the Day

daily chart

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