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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.

What Is Next For A Market Stimulus?

Jun 12, 2014

Good Morning! Steve Georgy with early morning comments for June 12, 2014 at 4:30 am CDT.

Weather is expected to be the market mover for the next few weeks or at least until trade focuses in on the stocks and planted acreage report at the end of June. Weather forecast is ideal for growing throughout the next 15 days.

The USDA basically reprinted the May Report for June as they made no change to ending stocks in corn. In soybeans they decreased ending stocks by 5 million bushels by increasing crush usage. This will make the NOPA Crush Report on Monday at 11:00 a potential market mover for old crop soybeans.

Wheat market fundamentals continue to receive negative news. The USDA lowered overall wheat production from last month’s estimate but raised 2014/15 ending stock.

Weekly export sales report will be released this morning at 7:30.

             Trade estimates for     Trade estimates for
                  2013-14                 2014-15
Corn          250,000-500,000          50,000-250,000
Soybeans     (-100,000)-100,000       300,000-500,000
Soymeal           0-125,000            50,000-150,000
Soyoil            0-60,000                  0-10,000
Wheat                0                250,000-450,000

Ethanol production increased 6,000 barrels a day to 944,000 barrels per day last week which equals a season high set in December. The Chinese DDG situation may change the economics for processors but they are still seeing positive margins despite lower DDG values.

China intends to auction another round of corn out of their reserves. The banning of US DDGs should create some domestic buyers.

Unemployment claims are expected to remain favorable. The market is expecting today’s weekly initial unemployment claims report to show a small decline of -2,000 to 310,000, reversing part of last week’s increase of +8,000 to 312,000. Meanwhile, the market is expecting today’s continuing claims report to show a small increase of +2,000 to 2.605 million following last week’s decline of -20,000 to 2.603 million.

Feeder cattle had a bit of a correction on Wednesday. Traders are watching the feeder market as an indicator of the cattle complex. Retailers are booking their needs for the July 4th holiday and then the question is whether or not beef prices can hold going into the "dog days of summer." Beef values were mixed with choice down .69 and select up .60. The CME Feeder Index is 196.40.

Traders are expecting the peak tightness in market hogs to come in August and early September. Increased weights are compensating for numbers currently. Pork cutout values are down 1.40.

Markets as of 4:30 AM CDT          

  • Jul Corn   +1 1/2   
  • Jul Beans   +6
  • Jul Wheat   +3 1/2
  • Aug Cattle  -.40
  • Jul Hogs    +.02
  • Sep Dlr     -.01
  • Sep S&P     +1.75
  • Jul Crude   +1.13
  • Aug Gold   -.04

Chart of the Day

daily chart

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