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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.

Gains Lead to Profit Taking

Jan 15, 2013

Good Morning! Paul Georgy with early morning comments for January 15, 2013 at 4:50 am. Grain futures are mixed on profit taking after Monday’s gain. With corn ending stocks now below Oct 2012 estimates, China back buying US soybeans and soybean crush running well above what is needed to meet USDA projections, what more do you need to fuel the rally in grains. After further analysis, Allendale’s Rich Nelson says "Be careful about getting too excited about these bullish looking numbers". In years where we have an early harvest, the first quarter use is large but the March number usually leads to adjustments. Export demand has to pick up quickly in order for us to meet the new numbers from USDA. Export sales now have to only reach 85% of last year’s level instead of 90%. There is hope however as the Mississippi River is navigable again which should lessen barge freight rates and make US grain more competitive at the gulf. Further weakness in the US dollar could also create buyer interest however US grains are still higher priced than the rest of the world. Weather conditions are drying out in Argentina. Traders will begin to be concerned about the rains shutting off and it turning dry after their early season rains. Celeres has raised their estimate for Brazil’s soybean production to 80.43 mmt from last month’s estimate of 79.02 mmt .Funds were huge buyers yesterday, buying 15,000 soybean contracts, 11,000 corn contracts and 6,000 wheat contracts. Agriculture Secretary, Tom Vilsack will stay on for Obama’s second term. USDA expects a decline in beef production in 2013 by 4.3% and has pushed most of that decline in production to the 4th quarter of 2013 where they are now expecting a 9% decline from last year. Boxed beef is mixed with choice down .15 and select up 1.27. Cash cattle are still waiting for bids to develop. Hog weights are lower and packer margins improved on seasonal buying. Futures bounced off of oversold condition. Pork cutout was down .48 on Monday. Allendale’s Ag Leaders Conference is on January 25 and 26, 2013. Hope to see you there!
Markets as of 4:50 AM
  • Mar Corn    - 1/4
  • Mar Beans   -7 1/4
  • Mar Wheat   +4 3/4
  • Feb Cattle  -.32
  • Feb Hogs    -.15
  • Mar Dlr     +.04
  • Mar S&P     -2.25
  • Jan Crude   +.01
  • Feb Gold    +11.80
Contact Allendale: 800-262-7538

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