Sep 19, 2014
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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.

Old Crop Bean Demand In Spotlight Again

Jul 08, 2014

Good Morning! Paul Georgy with early morning comments for July 8, 2014at 4:45 am CDT.

Grain futures are mixed with corn and wheat are higher on bargain hunting; soybeans are lower.

The forecast for temperatures to be below average for the next 10 days throughout the Midwest sets the stage for excellent pollination conditions. If the forecast comes true it would make it the fourth coolest pollination period since 1980. This would put this year in the category with 2004 and 2009 when record yields were set in corn.

Crop ratings for corn are 75% good/excellent which is the 5th best in the last 28 years.

Soybean ratings came in at 72% good/excellent which out of the last 28 years there was only 1 year that had a higher rating during this week.

Winter wheat harvest advances 14% to 57% complete versus 60% average. Spring wheat ratings were steady with last week at 70% good/excellent. Pasture and range conditions were down 2% to 56% good/excellent compared to 49% last year.

The Goldman Index Roll out of the August contracts begins today.

Yesterday funds sold 9,000 wheat, 11,000 corn and 3,000 bean contracts.

Demand bulls are getting concerned as there is more talk of China trying to resell several cargoes of soybeans out of Brazil and one load out of the US gulf. Also there are reports that South Korea bought 60,000 tonnes of soymeal from South America with a Chinese origin option.

USDA Supply and Demand Report on Friday should put the final touches to old crop ending stock picture for soybeans. The corn balance sheet has the potential for a lot of adjusting but ultimately finishing with higher ending stocks than last month.

The economics calendar is light this week as the Dow is testing all-time highs of 17,000. US Consumer Credit is expected to show a big increase on today’s report.

Lean hog futures are being driving by the strength in product. Pork cutout values were up another .32 to 134.52. Even with tight hog supplies packer margins have improved to over $91.00 per head. Look for profit taking to provide setbacks in futures as cash hog supplies from now through September should be the tightest of the season.

Live cattle futures are being watched as yesterday’s sharp rally and then a sell-off could be construed as a reversal. However cash trade is expected to be steady to higher this week with a possible 160 trade. Product values are firm as retailers restock shelves after the holiday. Choice was up .06 and select up .11 on Monday. The CME Feeder Index is 214.58.

Markets as of 4:45 AM CDT          

  • Sep Corn   +1 1/2   
  • Aug Beans   -3 1/4
  • Sep Wheat   +4     
  • Aug Cattle  +.30    
  • Aug Hogs    +.07
  • Sep Dlr     +.05
  • Sep S&P     -2.75
  • Aug Crude   -.15
  • Aug Gold   +2.60

Chart of the Day

daily chart

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