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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.

USDA Reports Dominate Traders Thinking

Jun 27, 2014

 Good Morning! Paul Georgy with early morning comments for June 27, 2014 at 4:30 am CDT.

Grain futures are lower on risk-off selling in all commodities.

Grain traders are adjusting positions ahead of the "Biggest Grain Report of the Year" on Monday, first notice day for the July contracts on Monday, the end of a month and end of a quarter and a holiday shortened week ahead.

Livestock traders have a Quarterly Hogs and Pigs Report due to be released at 2:00 pm today. Grain traders will be looking at this afternoon’s report to get a prospective of corn and meal usage.

With all the rain we have seen throughout the cornbelt, this week’s US Drought Monitor suggests not much change from last week in the dry to severe dryness areas of the southern plains.

Kansas Wheat Commission and the Kansas Association of Wheat Growers are reporting Kansas wheat harvest is underway. Yields vary by region with overall range 8 to 60 bushels per acre. A farmer in the Scott City area has had over 6.5 inches of rain in June which has doused his chance of harvesting 8 to 15 bushels per acre.

Reuters trade estimate survey for Monday’s USDA Planted Acres Report:

                                                  Corn  Soybean     All   Spring   Durum

                                                                            Wheat    Wheat   Wheat

Average trade estimate          91.725   82.154   55.818   11.860   1.790

Highest trade estimate          92.200   84.000   57.000   12.200   1.900

Lowest trade estimate           91.000   80.500   54.800   10.500   1.694

USDA March estimate            91.691   81.493   55.815   12.009   1.799

USDA 2013 final                      95.365   76.533   56.156   11.596   1.470

The U.S. hemp industry is back. A provision in the 2014 farm bill signed by President Obama on Feb. 7 removed hemp grown for research purposes from the Controlled Substances Act, the main federal drug law. American farmers have been watching as Canadian farmers clear huge profits from hemp: $250 per acre in 2013. By comparison, South Dakota State University predicts that soy, a major crop, will net U.S. farmers $71 per acre in 2014.

(Reuters) – The U.S. Food and Drug Administration is opening the door for livestock feed manufacturers and pharmaceutical companies to roll out nanotechnology products that could make animals gain weight faster or absorb medications more quickly.

Hogs and Pigs Report Estimates:

                                        Ranges     Average     Mln head

All hogs June 1           96.0-98.9     97.1       63.200

Kept for breeding     101.0-102.5   101.8        5.990

Kept for market         95.5-98.6     96.8       57.310

Weight Groups

Under 50 lbs                95.4-101.4    98.2

50-119 lbs                      94.0-99.5     96.2

120-179 lbs                   92.3-96.7     95.3

Over 180 lbs                95.5-97.5     96.5

March-May Statistics

Farrowings                 101.9-105.0   102.8

Pigs per litter            93.4-98.0     95.3

Pig crop                       95.7-99.9     97.7   

Farrowing intentions

June-August               102.0-102.7   102.2

Sept-November         101.5-103.0   102.5

Weight breakdown should be an important part of this report as trade will be looking for a confirmation of supply. Pork cutout value is down 1.86.

Cash cattle traded as high as 155.50 on Thursday as packers need inventory to meet product commitments. Cattle futures set new highs for the third day in a row. Look for profit taking ahead of the weekend.

Average steak prices from the weekly grocery-store ads in Chicago are $8.49 per pound compared to $5.89 last week and 4.43 per pound last year. Beef cutout values continue to the charge higher with choice up .49 and select down .61. The CME Feeder Index is 211.23.

Markets as of 4:30 AM CDT          

Jul Corn   -1 1/4    
Jul Beans   -2 1/4
Jul Wheat   -5       
Aug Cattle  -.50
Jul Hogs    -.25
Sep Dlr     -.05
Sep S&P     -2.50
Aug Crude   +.00
Aug Gold   -1.10


Chart of the Day

daily chart

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