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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.

Strong Cash Markets Fuel Hopes

Nov 22, 2013

Good Morning! Paul Georgy with early morning comments for November 22, 2013 coming to you from New York City at 5:00 am. Grain futures are higher on better demand prospects and strong vegetable oil markets. Japan and Iraq are looking for wheat.

Grain markets are looking for any news to react too. Yesterday the good export data and stronger cash markets were the drivers. We expect farmer movement of grain to be minimal until mid-December. Basis for corn and soybeans could become stronger even if futures prices move higher or lower. Keep an eye on the spread between Dec and March futures as it could continue to narrow due to the strength in cash markets.

Wheat quality out of Australia is creating concern as frost and heavy rains are reducing harvests.

China’s Ag Ministry says they set to reap the largest grain harvest on record which is an increase for the 10th straight year.

The South American weather forecast looks like there is moisture on the way and ample opportunity to get the seed in the ground. The doctor could not have ordered it any better.

In Washington, the Ag Committee members have met several times recently without any agreement. The size of the food stamp cuts is the biggest hurdle with only a few weeks left in this year’s session.

Funds bought an estimated net 7,000 corn contracts, sold 1,000 wheat, bought 7,000 soybean, bought 2,000 soymeal and bought 5,000 soyoil contracts.

Yellen’s approval as the next Fed Chairman is almost a done deal as her nomination passes the Senate Banking Committee.

Cash cattle traded lightly on Thursday at $131 in Texas and Kansas which is $1.00 lower. This should not be much of a surprise as product prices, packer margins and futures prices were all lower this week. The USDA Cattle on Feed report today will give traders an indication of the tightness of market-ready cattle.

Estimates for the Cattle on feed report at 2:00 pm today are:

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

Beef cutout values were lower on Thursday with choice down .76 and select down .87. The CME feeder Index is 164.82.

Cash hog prices, as measured by the lean hog index, generally bottom at this time of year (the peak of the year’s slaughters). The latest lean hog computation comes to 82.49. Futures are implying that it will get back to 86.25 by December 13. Pork cutout values are up .13.  

Markets as of 5:00 AM

  • Dec Corn    +1 1/4
  • Jan Beans   +10 1/2
  • Dec Wheat   +3 1/2
  • Dec Cattle  -.07
  • Dec Hogs    -.32
  • Dec Dlr     -.21
  • Dec S&P     -1.25
  • Jan Crude   -.23
  • Dec Gold    -1.60
Chart of the Day

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