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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 Weather Trump USDA Report?

Jun 28, 2012


Good Morning! Paul Georgy with early morning comments for June 28, 2012 at 5:10 am. Corn and soybean futures are higher this morning. The weather is trumping all other news stories as we approach Friday’s report. Drew Lerner of World weather Inc. says, "The bottom line remains one of concern regarding the dry bias in place across the lower Midwest. With the exception of rain predicted July 5-6 the region from Kansas to southwestern Ohio and southward to the Delta and Tennessee River Basin have little chance for significant rain leaving crops severely stressed and vulnerable to further production cuts. Northern Midwest weather will continue most favorable for crop development." The demand side of the equation is starting to raise its head but getting very little attention. These issues will affect the price of corn once supply can be stabilized. We had Valero Energy group close down another 110 million gallon ethanol production facility citing high corn prices and low ethanol prices. Brazil continues to be a very aggressive in the export market with their cash corn being offered more than $30 cheaper than US corn. These factors are being overshadowed by the USDA planted acreage due to be released on Friday morning. Average trade estimates for corn planting is for a slight increase from the USDA March estimate. Trade is expecting soybean acres to increase by more than 1.5 million more than the March USDA number. Weekly export sales data will be released at 7:30 this morning. Trade estimates are: corn 300 to 500 tmt, soybeans 500 to 700 tmt, wheat 450 to 650 tmt. Tomorrow is first notice day for July contract in grains. The pork industry has an important USDA Quarterly Hogs and Pigs Report on Friday afternoon. Traders will be looking for signs of further herd liquidation as breakeven is deep in the red due to the rise in corn and meal prices. Pork cutout was up .10 on Wednesday. Cash cattle trade is at a standstill with feedlots expecting to see trade 1.00 to 2.00 higher than last week. Packing plants will be working on Saturday due to the holiday next week. Boxed beef was slightly higher with choice up .19 and select up .10. Thanks again to Drew Lerner from World Weather Inc. for participating in the Allendale Ag Leaders Webinar. You can listen to the recorded webinar by clicking this link Ag Leaders Webinar.
Markets as of 5:10 AM
Jly Corn    +10 1/2
Jly Beans   +6 1/2
Jly Wheat   -1
Aug Cattle +.42
Jly Hogs    -.12
Sep S&P     -7.25
Sep Dlr     +.03
Auq Crude   -.19
Aug Gold    -9.20
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Allendale Advanced Charts
Yesterday’s very impressive rally in Oct. Cattle has many factors implying a potential bottom in prices. 1. Less momentum to the down side over the last 8 trading sessions, 2.Finding an area where buyers were present in the past in this case the BSE bottom. And lastly taking out four days of selling in one session implies that buyers are present at this level. Of course a close below yesterdays $119.65 once again opens up the downside to potential losses.

Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Allendale’s guest for Tuesday’s monthly webinar, Drew Lerner, told us this year is running parallel with weather patterns of 1976. In this year, Allendale corn yields fell by 7% from that year’s trend yield. Taken off this year’s 161.4, that would imply yields at 150.1. Drew clearly told us this was not the nationwide disaster years of 1983 or 1988.
Contact Allendale: 800-262-7538
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.


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