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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.
 

Weather Market Versus Demand

Jan 31, 2013

Good Morning! Paul Georgy with early morning comments for January 31, 2013 at 5:00 am. Grain futures are lower on profit taking ahead of the export sales data at 7:30. A weather market is in full swing caused by varying forecasts for #Argentina and #Brazil. Some traders are more excited about too much rain in Brazil where bean harvest is being delayed. Others are focusing in on the drying in Argentina where #beans could be hurt more than corn. Markets at the CME will be very sensitive to weather forecasts for a few more weeks. Technical buying kicked in yesterday after the soybeans and corn took out recent resistance levels. Support now crosses at old resistance which is 7.35 in March corn and 14.60 in March soybeans. Demand slows for corn as weekly EIA ethanol production drops 22,000 barrels per day to 770,000 last week. That equates to an 18% drop from same period last year. The year to date average is 11.4% below last year and the USDA is projecting a 10% decline. Traders will be watching the export sales numbers out later this morning for some hope that we can hit the lowered demand expectations. USDA weekly export sales estimates are: #corn 150 to 300 tmt, #soybeans 650 to 850 tmt, soymeal 150 to 200 tmt, soyoil 15 to 25 tmt and wheat 350 to 550 tmt. Mississippi River traffic is still snarled at Vicksburg. Late yesterday, it was estimated that over 1,000 barges were waiting to pass through the area. Funds bought an estimated 10,000 corn contracts, 4,000 wheat, and10,000 soybeans contracts. Cattle Inventory Report will be released on Friday at 2:00 pm (CST). Trade is expecting a reduction of nearly 2% in total inventory due to last year’s drought. This is a 60 year low in inventories. Russia confirmed they will ban US beef and pork starting Feb. 11. Boxed beef was lower with choice down .13 and select down .08. Weather conditions are hampering hog movement which is support for nearby futures. Pork cutout values were down 1.12 on Wednesday. I will be on the road doing several meetings in February, details can be found at http://www.allendale-inc.com/upcoming-events. Hope to see you in our travels.
Markets as of 5:00 AM
  • Mar Corn    - 1/2
  • Mar Beans   -9 1/2
  • Mar Wheat   -2
  • Feb Cattle  +.32
  • Feb Hogs    -.02
  • Mar Dlr     +.03
  • Mar S&P     -1.50
  • Mar Crude   -.30
  • Feb Gold    -5.80
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

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