Sep 16, 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.

Will Domestic Meal Demand Drive Soybean Prices Again?

May 15, 2014

Good Morning! Paul Georgy with early morning comments for May 15, 2014 at 4:15 am.  

Grain futures are mixed with corn and wheat lower. Soybeans are finding support ahead of the crush data at 11:00 am.

Allendale’s next Ag Leaders Webinar is Tuesday May 27th at 8:00 PM CDT.  Register here. We will be discussing some of the bio-fuels issues in the headlines.

The average trades guess for the NOPA crush report is 132.26 million bushels. This would be up a strong 10% above last year. USDA is suggesting the whole-year crush at 1.695 billion bushels or 0.4% over last year. The problem is that Sep through April usage numbers, assuming the average guess noted above, would be running 14.9% over last year! Therefore in order for us to hit USDA’s very low domestic use estimate, crush would have to run 25.2% under last year for the balance of the marketing year, May through August.

The USDA Weekly Export Sales data will be released at 7:30. The following are estimates surveyed by Reuters:

                               for 2013/14                  for 2014/15
Wheat              100,000-300,000           150,000-300,000
Corn                 200,000-400,000             50,000-250,000
Soybeans      (-100,000)-50,000             200,000-350,000
Soymeal            25,000-150,000                       0-150,000
Soyoil                         0-20,000                         0-10,000

Last week USDA increased the 2013/14 corn export estimate by 150 million bushels due to the strong recent sales. In order for us to meet USDA’s new corn export target sales can be 19% lower than the five year average for the rest of the year. Today’s trade estimate is 23% to 61% less than last year.

France AgriMer cut its forecast for French soft wheat stocks for the 2013/14 season to 3.1 million tonnes from 3.3 million due to expectations of higher exports.

USDA increased their corn for ethanol estimate (Sep ’13 – Aug ’14) by 50 million bushels. They now see an 8.6% increase for the year. We currently are running 10.4% over last year.

Informa is expected to update 2014 planted acreage area later today.

Deere & Co. forecasts U.S. farm commodity prices for 2014/15 soybeans of $10.25 per bushel versus their previous forecast of $10.50 per bushel and prices for 2014/15 corn of $4.35 per bushel versus a previous forecast of $4.25 per bushel.

The USDA will release the May 1 Cattle-on-Feed Report on Friday afternoon at 2:00 pm CDT. April Placements are expected to be 6.1% lower than last year. USDA’s cattle feeding margin ended the month with $216 per head profits on outgoing cattle. This strong incentive for heavy placements was curtailed by available feeder supplies. Corn averaged $5.02 in Western Kansas in March ($4.85 in March, $6.72 in April 2013). April placements help supply the September through November slaughter period. Cash cattle trade is quiet with most expecting steady to weak prices this week. Beef cutout values are weaker with choice down 1.53 and select down .07. The CME Feeder Index is 184.21.

Traders are trying to determine when hog supplies will feel the effect of the PEDv. Packers are reducing work time to improve their margins. Expect very choppy action for the next several months. Pork cutout values are up 1.30.

Markets as of 4:15 AM        

  • Jul Corn    -1 3/4
  • Jul Beans   +2 1/4
  • Jul Wheat   -6
  • Jun Cattle  +.05
  • Jun Hogs    -.40
  • Jun Dlr     +.13
  • Jun S&P     -1.00
  • Jun Crude   -.48
  • Jun Gold    -3.00

 Chart of the Day

daily chart

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