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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.

Does Less Corn Mean Higher Prices?

Jan 13, 2014

Good Morning! Paul Georgy with early morning comments for January 13, 2014 at 4:45 am.  

Grain futures are mostly higher as traders adjust positions after surprising USDA numbers. South American weather and planting prospects for 2014 will be on trader’s minds going forward.

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The weekend gave analysts time to review all the numbers the USDA shared with us on Friday. The most surprising was the reduction in corn yield. However you have to wonder if the USDA made adjustments for light test weight on the later planted corn? The first quarter usage was a surprise as the livestock industry was slow to react with heavier weight cattle and hogs coming to market later in the quarter. Expansion in the cattle and hog industries has not occurred yet. Ethanol demand was greater than expected. The USDA did not change their price targets for corn and soybeans for the 2013/14 marketing year.

Cash corn movement picked up on Friday as some processors believed they bought 10 days to 2 weeks of inventory. Basis was down 7 cents on a corn futures rally while soybeans were steady.

Traders are looking at the big reversal day in corn on the daily and weekly charts. This is likely to provide some technical support as 4.40 is the next level of resistance in March corn.

March soybeans remain in a trading range between 12.65 and 12.90.

China continues to buy US soybeans but traders are waiting for cancellations when South American harvest gets in full swing.

The CFTC Commitment of Traders report showed funds reducing long positions in soybean by 23,526 contracts.

Cash cattle traded this week at 139 to 140 which was 2 to 3 higher than last week and another record higher for fed cattle. Beef cutout values were higher with choice up 2.93 and select up 2.53. Retail prices continue to climb and the question is: How much will the consumer pay?

Pork cutout values were .89 lower. Futures traders are waiting for a signal that the recent back log of market ready hogs is cleaned up.

Livestock futures are called steady to lower of this morning’s opening.

Markets as of 4:45 AM

  • Mar Corn    +2 1/4
  • Mar Beans   -3 1/2
  • Mar Wheat   +5
  • Feb Cattle  Steady
  • Feb Hogs    Steady-Lower
  • Mar Dlr     -.05
  • Mar S&P     -5.00
  • Feb Crude   -.63
  • Feb Gold    -1.40

Chart of the Day


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