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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.
 

Holiday Markets Have Arrived

Nov 21, 2013

Good Morning! Paul Georgy with early morning comments for November 21, 2013 at 3:30 am. Grain futures are slightly higher in anther quiet session.

This report is prepared a bit early this morning because I have to catch an early flight to New York City for an NFA Board of Directors meeting.

Futures traders are focused on the USDA Export Sales report at 7:30 am. Trade estimates for today’s report are: corn 750 to 950 tmt, soybeans 650 to 850 tmt, soymeal 200 to 350 tmt, soyoil 30 to 80 tmt and wheat 375 to 475 tmt.

Cash grain movement is likely to come to a standstill as harvest is complete on the majority of farms. Producers will not be sellers on further weakness in futures. Historically basis levels get stronger into the first half of December as bin doors are closed and will not open until next year. However, grain will have to move sometime in 2014 as farmers have a larger amount of unpriced grain.

Weather conditions remain very favorable for South American crops. Some weather forecasters are starting to suggest the potential for dryer weather patterns in mid-December for that region. Traders believe it will take some kind of weather problems to support a rally in CBOT grain futures.

Ethanol production is running 8% above last year and the USDA’s target is 5% higher. Last week production averaged 904K compared to 927K last week.

Funds sold an estimated net 3,000 corn, 2,000 wheat and 2,000 soybean contracts on Wednesday.

Talk out of Washington is now suggesting an extension of the current farm bill is more likely than new legislation.

December CBOT contracts options will expire on Friday.

Allendale is changing the way we will deliver the 26th Annual Ag Leaders Conference, click here.

Historical and seasonal studies suggest hog slaughter could peak this week. Pork export demand is impacted by China’s purchases thus far in 2013 show they have imported 20% less than last year. However August and September exports averaged 18% higher than last year. December Lean Hog futures bounced off the 100 day moving average with next resistance crossing at 87.00 level. Pork cutout values were down 1.07 on Wednesday.

Fundamental cattle traders feel like they have been de-horned after the first few trading days this week. Technical chart damage has bullish traders hoping for a quick rally. Beef cutout values were mixed with choice up .32 and select down .60. CME Feeder Index is 165.01. The monthly Cattle on Feed report Friday at 2:00 pm.

                                         Average Est.
On feed Nov 1                          94.0  
Placements in Oct                 108.7      
Marketing’s in Oct                101.4      

Markets as of 3:30 AM

  • Dec Corn    +2 3/4
  • Jan Beans   +5
  • Dec Wheat   +2
  • Dec Cattle  +.02
  • Dec Hogs    +.25
  • Dec Dlr     +.01
  • Dec S&P     +1.75
  • Jan Crude   +.01
  • Dec Gold    -10.10
Chart of the Day

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