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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.
 

Final Session Of Ag Leaders Conference

Jan 30, 2014

Good Morning! Paul Georgy with early morning comments for January 30, 2014 at 4:35 am.  

Grain futures are mixed as we see some bargain hunters in the corn and wheat while soybeans are lower on demand concerns.

Don’t hesitate to call your Allendale Broker to discuss how the strategies that were discussed yesterday can work for you. An email was sent to all Ag Leader Conference subscribers late yesterday with links to listen to the recorded session. Today the soybean and livestock outlooks will be presented along with a technical analysis and strategies.

Register now to get our full price projections and trade strategies. Rich Nelson, Frank La Placa and Steve Georgy will present outlook, technical and strategies you can use delivered right to your home or office computer!

                                                         Full Agenda | Registration       

There doesn’t seem to be one factor of issue the trade is focusing on to justify the recent market action. Items which are being thrown around are: Potential lack of China interest due to the Lunar New Year Holiday, Weaker cash soybean prices in Brazil as harvest gets into full swing and talk of more cases of bird flu in China. The dominating reason seems to be we just don’t have any positive news to feed the bulls.

Wheat closed at new lows yesterday on heavy selling. Technical selling combined with a warmer weather forecast for Midwest chased out the bottom pickers.

Corn has turned into the follower in the grain complex however it has underlining support because of strong farmer holdings. The cold weather and snow has limited grain movement and increased consumption by livestock feeders.

Ethanol production remains strong although margins are shrinking dramatically. The general talk is that ethanol producers are squeezing out as much production as possible in the face of the coming margin squeeze. Natural gas has rallied 22% since the end of December. That adds another 3 to 5 cents per gallon to the cost of production.

Rogers Fund roll starts tomorrow which runs for 3 days and they will be rolling from March to May contracts.

At yesterday’s FOMC meeting the Fed decided to reduce bond purchases by $10 billion per month to $65 billion per month.

Trade estimates for this morning’s Weekly Export Sales Data:

Wheat             300,000-500,000      
Corn                550,000-750,000       
Soybeans        750,000-1,050,000   
Soymeal           100,000-200,000    
Soyoil                         0-30,000     

Traders will be looking for any signs of switching purchases from US to South America.

Cattle futures are finding support as cash trade develops at 146 to 147. Packer’s margins are narrowing as retailers resist high beef prices. Cutout values were lower on Wednesday, with choice down 3.99 and select down 3.24. The CME Feeder Index is 171.61.

The Lean hog futures were supported by fund buying on Wednesday. Cash hogs are weak as packers feel confident they will get enough inventories as temps warm up through the balance of week. We are hearing more talk that retail counter space is going to the other white meat instead of beef because of value. The pork cutout is down .22.

Markets as of 4:35 AM

  • Mar Corn    +1 1/4
  • Mar Beans   -4 1/2
  • Mar Wheat   +3
  • Feb Cattle  -.27
  • Feb Hogs    -.07
  • Mar Dlr     +.39
  • Mar S&P     +4.75
  • Mar Crude   +.56
  • Feb Gold    -8.20

Chart of the Day

Beans

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

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