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July 2013 Archive for 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.
 

Corn Harvest Begins in the South

Jul 31, 2013

Good Morning! Paul Georgy with early morning comments for July 31, 2013 at 5:00 am. Grain futures are mixed with spreading a dominating market mover. Buying old crop, selling new crop corn is again being supported by tight supplies.

Cash market basis for corn and soybeans improved at processors across the Midwest late yesterday. The lack of farmer selling and processors accessing needs and realizing that harvest is still 6 to 8 weeks away. It is expected that farmers will be anxious to harvest early and take advantage of basis premiums. Elevators will likely offer incentives such as free drying to get corn early. Some of our TX customers are already harvesting corn.

Weather conditions continue to improve as temps are expected to remain below normal for a few more days. The moisture moving across the cornbelt this week should reduce crop stress areas. Traders are already trying to analyze the effect of an early frost, however, the next big event is the August 12 Crop Production Report. Where will USDA put their yield estimate? Their trend yield is 163.6 and last month they used 156.6. More discussion on this subject as we get closer to report release date.

Futures are oversold but as one trader said “Why should I buy it?” There were no deliveries against the August contract in soybeans or meal however soyoil had 846 deliveries through July 19, 2013.

Cattle market is looking for any positive news to push prices above the 127 resistance area in the October contract. This market has been stuck in a sideways range for some time. Product values for the last 3 years have had sharp rallies into the third week of August. Can it happen again in 2013? Boxed beef was mixed with choice up .37 and select down .56. The CME Feeder Cattle index is 148.31 up .66. The cash hog markets came under pressure this week as the IA/MN market is down several dollars. Seasonally hog supplies are expected to grow. Pork cutout values were up 1.24 on Tuesday due to reduced slaughter. Sign up for a free trail to the Allendale Advisory Report.

Markets as of 5:00 AM

  • Dec Corn -1 1/2
  • Nov Beans +2 1/4
  • Sep Wheat +2 1/4
  • Aug Cattle +.12
  • Aug Hogs +37
  • Sep Dlr -.05
  • Sep S&P +1.50
  • Sep Crude +.33
  • Aug Gold +8.00

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Can We Hold A Turn around Tuesday Rally?

Jul 30, 2013

Can We Hold A Turn around Tuesday Rally?

Good Morning! Paul Georgy with early morning comments for July 30, 2013 at 4:45 am. Grain futures are higher. Can the rally hold throughout the session?

Crop ratings were 63% in Good/Excellent category for corn and soybeans which is above the 5 year average of 59% and 58% respectively. Weather forecasts are for ideal growing conditions for most of cornbelt. There are spots that missed the rain where crops may still be stressed. Overall, market bullish attitude has been shattered with cash basis and futures selloff in recent days. However, many farmers are telling us when harvest begins they intend to fill their bins then sell if they have some left over. 2013 has been a big income year for those producers who had crops to sell. This would suggest a lot of corn moving after the first of the year. Talk to your Allendale Broker to work out a strategy for you.

Traders continue to wrangle with what the USDA is going to do about the 2012/13 soybean ending stocks on the August Supply and Demand report. Crush margins are very attractive even with the selloff in meal and exports are running above expectations. The Roger’s Fund roll from Sep to Dec corn and wheat begins today and will run through Thursday. First notice day for the August contracts at CBOT is tomorrow. Outside markets are preparing for the unemployment data on Friday morning.

Hog slaughter was only 355,000 on Monday as 2 major hog packing facilities were closed. Product demand is tepid with cutout values up only $.46. Packer margins are about breakeven but we are going into a time slot where meat values decline and hog supplies increase. Monday’s IA-MN hog prices feel an average of $1.06 from Friday. Cash cattle trade is at a standstill while product has not been able to find a bottom. Choice beef was down $.74 and select was down $.49. Chart picture looks sideways in cattle and lean hog futures broke the 50 day moving average on Monday. Get the full story and strategies by subscribing today to the Allendale Advisory Report.

Markets as of 4:45 AM

  • Dec Corn +4 1/4
  • Nov Beans +2 1/2
  • Sep Wheat +4
  • Aug Cattle -.15
  • Aug Hogs -.90
  • Sep Dlr +.09
  • Sep S&P +1.50
  • Sep Crude -.67
  • Aug Gold -6.50

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Grains Start The Week Lower

Jul 29, 2013

Good Morning! Paul Georgy with early morning comments for July 29, 2013 at 5:00 am. Grain futures are lower on follow through selling from last weeks liquidation. Weather forecast is for cool temps to stick around this week with a chance of rain moving throughout the cornbelt late this week. We are only 2 weeks away from the August crop report which will attract a lot of attention. Traders will be hoping to get some adjustment on harvested acres and yield. With last weeks cool temps and rainfall over much of the Midwest, traders are expecting to see an improvement in crop conditions. There are analysts already talking about the potential for corn yields to come in around 160 bushel per acre on the Aug report. That is significantly different than what we were hearing last week. The CFTC commitment of traders report showed managed money funds increased short positions in corn by 46,099 to 83,361 contracts. They reduced longs in soybeans by 14,790 and increased shorts in wheat by 14,401. On this report, the CFTC also showed that non-commercial traders increased longs to a record net long position in crude oil. Chart support in Dec corn now is near the 4.60 level and November soybeans have support at the 12.00 level. Livestock futures are looking for some supportive fundamental news such as an improvement in retail demand. Friday dressed meat closed the week with choice down .51 and select up .01. Cash cattle closed out the week at 121 which was 1.00 higher. Pork cutout values were down .05. The CME feeder index was 145.63 down .63 on Friday. Get the full story by subscribing to the Allendale Advisory Report.

Markets as of 5:00 AM

  • Dec Corn -3 1/4
  • Nov Beans -12
  • Sep Wheat -1
  • Aug Cattle Steady-Higher
  • Aug Hogs Steady-Lower
  • Sep Dlr -.12
  • Sep S&P -4.50
  • Sep Crude -.15
  • Aug Gold +10.70

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Bargain Hunters Provide Support

Jul 26, 2013

Good Morning! Paul Georgy with early morning comments for July 26, 2013 at 5:00 am. Grain futures are mixed on short covering ahead of the weekend and bargain hunters trying to pick a bottom. The spreads between nearby contracts and new crop have been the feature this week at the CME. The reduced basis adjustment made on Monday by processors was the catalyst to catastrophic declines in futures and cash markets for soybeans. Corn processors pulled the plug on buying corn yesterday. One client said he had a 2.00 plus basis on Wednesday and yesterday there was no bid. One has to remember that corn has more than the processor demand. There are some ethanol plants that are still looking for corn and will have to pay-up to pull it out of farmers bins. Liquidation of long Sep short Dec spreads has had over a 30 cent move since Monday. We are hearing horror stories of traders who were loaded up on bull spreads and are being forced to liquidate. Weather forecasts are a little wetter for the majority of the Midwest over the next 10 days. However, liquidation is overshadowing all other news. August options expire today which could add more volatility going into the close. The Spring Wheat Crop Tour sees US 2013 spring wheat yield at 44.9 bushels per acre vs. year-ago 44.9, the five-year tour average is 43.3 bushel per acre. Funds were net sellers of an estimated 11,000 soybean contracts, 6,000 soymeal, 2,000 soyoil, 4,000 corn and 2,000 wheat on Thursday. Weekly corn export sales were disappointing but soybeans posted some good numbers. Chart support in the Dec corn is 4.60 and 12.00 seems to be the downside target in November beans. Cash cattle trade has been light for the week and it is expected packers will be more aggressive today. Product firmed up again yesterday with choice up .77 and select up .48. Beef packer margins are in the black. The CME Feeder Cattle Index was 145.86 up .07. Pork traders are cautious as they expect cash markets to weaken over the next few weeks. Pork cutout value was up 1.25. Pork packer margins are in the red. Call Allendale for strategies and trade ideas.

Markets as of 5:00 AM

  • Dec Corn +1 1/2
  • Nov Beans -2 1/2
  • Sep Wheat +5 1/2
  • Aug Cattle +.15
  • Aug Hogs +.25
  • Sep Dlr -.29
  • Sep S&P -4.25
  • Sep Crude -.77
  • Aug Gold -1.40

 

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Old Crop New Crop Spreads Dominate Trade

Jul 25, 2013

 

Good Morning! Paul Georgy with early morning comments for July 25, 2013 at 5:00 am. Grain futures are mixed with corn and wheat higher, soybeans lower. Outside markets are providing a risk-off attitude this morning. Liquidation of bull spreads have been the major focus in the corn and soybean complex this week. Now that a successful pollination period is nearing completion, end-users have pulled back their enthusiasm to pay up for old crop corn and soybeans. Bean and meal basis has taken a huge hit the last few days and some processors have moved their bids to the November contract. A processor in IA dropped their bean basis by 1.20 yesterday in soybeans. Corn basis took a hit yesterday although not due to movement of grain. It is assumed harvest will begin in a few weeks in the south and some of that grain could be railed north. US corn export business continues to be passed by. This week a few of the good customers of the U.S. went to South America instead and bought corn for December delivery. What will it take to get our exports back on tract? We will need more than China as a buyer. Wheat tour results will be out this afternoon. Details will be available in the Allendale Advisory Report. Export sales data will be released this morning at 7:30, view charts after 8:00 AM. Trade estimates are:

2012/13 2013/14

Corn 100,000 – 200,000 600,000 – 800,000

Soybeans 0 – 100,000 400,000 – 550,000

Soymeal 50,000 – 100,000 50,000 – 100,000

Soyoil 0 – 20,000 0

Wheat ********* 400,000 – 600,000

A few packers came out looking for cattle and paid $119 in Kansas yesterday. However packer interest has been very light and product values have been on a season downhill slide. Yesterday could be a change in the direction of boxed beef prices as choice was up .55 and select up.72. The CME Feeder Cattle Index was down .05 to 145.79. Pork cutout values continue the slide being down 1.34 on Wednesday. Cash hog prices are getting some push back by packers as margins have moved into the red. Tight hog supplies should be waning as cooler weather will help gains and numbers should be increasing as we move into the 4th quarter. Take a tour of the Allendale’s home page on the web. We have made some changes to better suit your needs.

 

Markets as of 5:00 AM

  • Dec Corn +1 1/4
  • Nov Beans -9 3/4
  • Sep Wheat + 1/2
  • Aug Cattle -.02
  • Aug Hogs -.17
  • Sep Dlr +.04
  • Sep S&P -12.00
  • Sep Crude -.86
  • Aug Gold -7.80

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Can Cool Temps Relieve Crop Stress?

Jul 24, 2013

Good Morning! Paul Georgy with early morning comments for July 24, 2013 at 5:00 am. Grain futures are steady to higher in a quiet session overnight. Short covering and spreading seem to be the major focus. The weather bull’s horns have been clipped by the unexpected rains yesterday and the forecast for cooler temps over the next 10 days to 2 weeks. Unless heat shows up again without any moisture, the next stage in the 2013 weather market will be the talk of early frost. Near-term traders are looking at the technical action on Tuesday as bearish. The outside day down in soybeans and key support being taken out in corn increases the potential for more selling pressure. December corn now has resistance at 4.90 and support at 4.66. November soybeans support will be watched closely at 12.50. Wheat market has been a momentum follower in recent weeks as harvest is progressing rapidly. The hard red spring wheat tour started on Tuesday and will release the results of their findings on Thursday afternoon. China releasing 3 mmt of soybeans out of 2010 reserve is similar to what they had done last year. The RFS hearings are going on in Washington this week. Option expiration for the August contracts is Friday. Yesterday’s sell-off in futures has triggered some farmer movement of corn and soybeans. Traders will be watching to see if yesterday was the turning point in eliminating some of the old crop cash premium for corn and soybeans. Those wanting to take protection in soybeans should give your Allendale representative a call today. Livestock markets struggle to rally when meat prices trend lower. Boxed beef was lower with choice down 2.64 and select was down 1.70. Pork cutout values Tuesday morning were suggesting a turnaround in the declining demand, however, by afternoon prices were down .02 on 409 loads. Chart resistance is being tested in cattle and hogs but without a sign of improving demand traders are tentative about buying strength. Sign up for the Allendale Advisory Report TODAY!

Markets as of 5:00 AM

  • Dec Corn + 1/4
  • Nov Beans +5 1/4
  • Sep Wheat +1 1/4
  • Aug Cattle -.05
  • Aug Hogs -.35
  • Sep Dlr +.13
  • Sep S&P +2.25
  • Sep Crude -.13
  • Aug Gold +5.00

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Cool Weather For Pollination Is What The Doctor Ordered

Jul 23, 2013

Good Morning! Paul Georgy with early morning comments for July 23, 2013 at 4:45 am.  Grain futures are lower as a storm system moves across NE. Some of the dryer areas received moisture last night. Cooler temps are forecast for the period of peak corn pollination which has trader’s reluctant buyers in new crop contracts. Crop condition ratings for corn were down 3% to 63% G/E while soybeans were downgraded by 1% to 64% G/E. Many traders were expecting as much as a 5% decline due to dry weather this past week. The next few days’ price direction will be led by weather forecasts and option expiration on Friday. The Dec corn contract has critical support at the 4.90 level. A close below that level could set the stage for a test of 4.50. Traders are also talking about the potential reduction in production on the August USDA report because of declining crop conditions. Rich Nelson, Allendale’s Chief Strategist, compared historical losses based on lack of moisture in the western cornbelt and suggests it could take the national average yield to below 150 bushel per acre. However, when making the adjustment for increased production in the eastern part of the belt it is likely the USDA will not adjust their yield number that dramatically on the August report. Tight old crop supplies are keeping the support under the new crop as traders find it difficult to be too bearish with cash market premiums. It has been reported that Asian buyers, which are normally US customers, have purchased 600,000 tonnes of corn out of the Black Sea region and additional amounts out of Brazil. What will it take to get our export business back? Cold storage data for meats provided a surprise for pork stocks. The average trade guesses for the June 30th pork stocks were 625.8 million lbs. The actual USDA number was 564.9 million lbs. This represents a huge 94 million lb. drop from last month which is the largest one month drop for any month in history. Beef stocks were in line with trade estimates and a considered neutral. The Feeder Cattle Index was up .48 to 146.47. Cash cattle trade is at a standstill with offers at 121 to 123. Boxed beef was lower on Monday with choice down .24 and select down .97. Pork cutout values were up .73. Thanks to all who attended the July Ag Leaders Webinar last evening! If you were unable to attend the live broadcast you will be able to listen to the recorded session later this morning by checking at www.allendale-inc.com.

The results of yesterday’s poll question: Where do you think the "Fall Low" for December Corn will be?

$4.50-$4.75–28.92%
$4.25-$4.49–34.34%
$4.00-$4.24–19.28%
$3.75-$3.99–12.65%
Below $3.75–4.82%
 

Markets as of 4:45 AM

  • Dec #Corn    -7 1/4
  • Nov #Beans   +2 1/2
  • Sep #Wheat   -5 3/4
  • Aug #Cattle  +.07
  • Aug #Hogs    +.52
  • Sep Dlr     +.12
  • Sep S&P     +3.50
  • Sep Crude   -.59
  • Aug Gold    -8.00

 

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Crop Conditions Now In Focus

Jul 22, 2013

Good Morning! Paul Georgy with early morning comments for July 22, 2013 at 5:10 am.  Grain futures are mixed. The outside markets are providing support as world investors have a risk-on attitude this morning. Some areas of the cornbelt did not get enough rain but there is more expected this week. The GFS and Euro models are in agreement for the beginning of the week. Cool temperatures should support corn pollination this week. Tonight’s Ag Leaders Webinar will discuss pollination weather and yields. Crop conditions are anticipated by traders to be down 2 to 3% in the GTE category. Technical support in Dec corn is 4.90 ½ which a close below that level could trigger additional selling. Spreading remains the major feature as tight cash markets provide support for the nearby contracts. CFTC commitment of traders showed managed money covered shorts last week in corn and wheat. Their net positions went from -55,767 to -37,262 in corn and from -47,844 to -34,261 in wheat. They added 12,244 to their already long position in soybeans. Funds in lean hogs were near record net long position levels. Market ready hog numbers typically build from now into fall. With pork prices plowing lower since late June and cash hog prices holding their ground, you don’t have much of an incentive for packers to go after the extra numbers. Something has to give, cash pork has to gain or cash hogs have to drop. Seasonally, cash prices slip into the fall. The Cattle on Feed report was neutral on the surface. However when drilling down into the number, a negative highlight arises where we found heavyweight feeder placements (those over 800 lbs.) were 27% over last year. These cattle should finish out in October. This is suggesting cattle feeders are already taking advantage of cheaper feed prices on the horizon. Register here for the tonight’s Ag Leaders Webinar: Stalking Yields. As the issue of acreage is settled, at least for now, with the June 28th acreage report, we turn our attention to the potential yield setup for this year’s crop. Join us as Rich Nelson and a special guest agronomist break down what we could have in store.

Where do you think the "Fall Low" for December Corn will be? Take our Weekly Poll Here

Markets as of 5:10 AM

  • Dec #Corn    -2 1/2
  • Nov #Beans   +2
  • Sep #Wheat   +1 3/4
  • Aug #Cattle  Steady-Higher
  • Aug #Hogs    Steady-Higher
  • Sep Dlr     -.29
  • Sep S&P     +2.00
  • Aug Crude   +.61
  • Aug Gold    +21.70

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Weather Expected To Cause Active Markets Sunday Evening

Jul 19, 2013

Good Morning! Paul Georgy with early morning comments for July 19, 2013 at 5:15 am.  Grain futures are mixed as traders worry if the anticipated forecast will develop. If the rain actual arrives as the Euro and GFS models are now forecasting in the 1 to 5 day period, the weather bulls will have problem. Sunday night could lead to explosive markets up or down. As we finish out the week, traders are talking about the possibility that China could buy a few more cargoes of new crop corn now that Dec is below $5.00. Margins will work for shipments into southern China. Soybean bean crush margins in the US are still positive and traders are now concerned that the early new crop bean harvest could go to the export market due to China’s aggressive purchases. Soybeans broke the 20 and 50 day moving average support on Thursday. Wheat harvest is progressing but quality problems in the eastern cornbelt are showing up. We are getting reports from producers that soft red winter wheat yields are not quite as good as earlier expected. Egypt bought wheat out of the Black Sea region because of price. South Korea announced overnight that they bought 60,000 tonnes of wheat from Black Sea Region. Money flow into the stock market continues while fund managers have pulled back on investments in commodities. Commitment of Traders report will be out later this afternoon to show fund activity from Tuesday of last week to Tuesday of this week. Cattle on Feed Report will be released at 2:00 pm today.

Cattle on Feed Report estimates are:

Reuters Survey                   Ranges           Average        Mln Head
On feed July 1                   96.0-97.7           97.0                10.389
Placements in June         89.3-99.8           94.7                 1.576  
Marketing’s in June        93.4-95.4           94.5                 1.857  

 

August lean hog futures continue to find support due to the $5.00 discount to the cash index. Pork cutout values were down 1.27 on Thursday. Boxed beef values also slipped, choice was down .14 and select down .05. The CME Feeder Index was up .18 to 145.65. Still waiting for cash cattle to trade this week. You can get full details of the report by subscribing to the Allendale Advisory Report. July 22nd is the Allendale Ag Leaders Webinar.

Markets as of 5:15 AM

  • Dec Corn    -2 1/4
  • Nov Beans   +4 1/4
  • Sep Wheat   +3 1/4
  • Aug Cattle  +.05
  • Aug Hogs    +.05
  • Sep Dlr     +.07
  • Sep S&P     -1.25
  • Aug Crude   +.30
  • Aug Gold    +2.50

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Will December Corn Hold Chart Support?

Jul 18, 2013

Good Morning! Paul Georgy with early morning comments for July 18, 2013 at 5:10 am.  Grain futures are lower as weather models add a little more moisture for next week and the likelihood that the ridge will back out to the west. We are in the second stage of this year’s weather market which will last until corn is pollinated and we can see the kernels on the ear. NOAA will release its August forecast later this morning. The trade will be watching that data closely. December corn support, at 4.91, is important to watch because a close below that level could trigger further downside selling. Wheat market fundamentals are not that negative. Harvest will be more than 75% complete by weeks end. China continues to buy wheat to replace their poor quality harvest. Estimates are now suggesting China could purchase 10 mmt this year. Ethanol production data was less than last week but up 9.3% from last year. Ethanol production is 8.4% below a year ago while USDA is forecasting a year over year drop of 7.2%. At 7:30 this morning USDA will provide us with the Weekly Export Sales data. Old crop soybean sales could be a market mover as traders wonder how USDA will deal with tight bean supplies. 

Trade estimates are from Reuters in thousand tonnes:

                                  2012/13 Estimates                2013/14 Estimates      
Corn                             zero-200,000                    1,200,000-1,400,000     
Soybeans                     zero-200,000                       450,000-650,000       
Soymeal                  50,000-100,000                          25,000-75,000         
Soyoil                         5,000-10,000                                       zero              
Wheat                       *************                           900,000-1,200,000           

 

Fed Chairman Bernanke’s comments yesterday were no help for commodities. Cattle futures have come under pressure due to technical selling and position squaring ahead of Friday’s COF report. Feedlots are hoping for a higher cash market this week but history suggest cash lows could be made. Boxed beef values continue to pressure packer margins. Choice was down 1.03 and select down .57. The CME Feeder Index was up .14 to 145.47. Wholesale pork product prices fell again on Wednesday, down .42. There is a full $11.36 between the June’s high and current wholesale pork prices. It is hard moving pork right now in the face of heat across the US. On the other hand cash hogs have been waging a battle in psychology. Cash markets have not fallen much from June highs. The Allendale Ag Leaders webinar is July 22.

Markets as of 5:10 AM

  • Dec Corn    -4 3/4
  • Nov Beans   -7 1/2
  • Sep Wheat   +1 1/2
  • Aug Cattle  -.07
  • Aug Hogs    +.30
  • Sep Dlr     +.08
  • Sep S&P     +1.25
  • Aug Crude   -.17
  • Aug Gold    +2.50

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Most Important Pollination Time is Next Two Weeks

Jul 17, 2013

Good Morning! Paul Georgy with early morning comments for July 17, 2013 at 5:10 am.  Grain futures are mixed as prices retreat from early session highs. Outside markets are waiting for Fed Chairman Bernanke’s comments to Congress later today. Corn will remain sensitive to weather forecasts as we approach peak pollination time. Soybeans have led the charge higher in recent days due to tight cash supplies and deep discount of nearby futures. Soybean basis slipped again yesterday as processors are suggesting they have enough inventory for the moment with new crop only a few months away. Cash meal remains strong as some processors are shutting down for seasonal maintenance. China is expected to import a record amount of soybeans in July. US wheat harvest is progressing rapidly with the current period of dry weather. Russia is forecasting an abundant small grain harvest this year. Currently Black Sea wheat is $100 per ton cheaper than US with Aussie wheat $50 to 60 per below US. Wheat, domestically, is filling the void for corn supplies in feedlot areas. Spreading wheat versus corn has received some interest by seasonal traders. Livestock markets struggle as cash bids and offers are several dollars apart. Packer margins are not providing the incentive for higher feed prices yet. Feeder cattle are finding support because of the potential for lower feed cost and a potential tight supply of market ready cattle in the 4th quarter. Cattle-on-Feed report is out on Friday at 2:00 pm. Pork cutout values were down .68 on Tuesday. Tight cash hog supplies and the deep discount of August futures to cash is giving support to futures buyers. Sign up today for the July Ag Leaders Webinar next Tuesday July 22. Thanks to all who participated in the Allendale Poll yesterday.

We asked: In what timeframe will your corn tassel and pollinate?

July 17-23–28.19%
July 24-30–38.3%
July 31-Aug 6–22.34%
Aug 7-13–8.51%
After Aug 14–2.66%

 

Markets as of 5:10 AM

  • Dec Corn    – 3/4
  • Nov Beans   -4 3/4
  • Sep Wheat   +2 1/4
  • Aug Cattle  +.02
  • Aug Hogs    +.12
  • Sep Dlr     +.05
  • Sep S&P     -4.00
  • Aug Crude   -.5
  • Aug Gold    -5.50

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Can Drop In Western Crop Ratings Change Price Outlook?

Jul 16, 2013

Good Morning! Paul Georgy with early morning comments for July 16, 2013 at 4:45 am.  Grain futures are higher on the crop conditions downgrade. The USDA crop condition report confirmed a drop in G/E rating for corn and soybeans. Most of the deterioration came in the western states of Kansas (-9%),  Nebraska (-5%) and Missouri (-4%). According to Allendale’s calculation a drop of 15% from trend yield in those states may only impact the ending stocks for corn by 200 million bushels. There also are states where crops are improving and could offset some of the loss. The USDA has to face the facts sooner or later on old crop soybean usage and supplies. The NOPA crush data was 2 million bushel greater than trade estimates. This means, in order to achieve the USDA balance sheet numbers, soybeans for crushing must be 23% below last year for the final 2 months of the marketing year. Soybean exports are 1.305 billion bushel (already been shipped out) of USDA forecast of 1.330 billion bushel for this marketing year 2012/13. Weather has improved for winter wheat harvest however the July 15 date maybe the last day for double crop bean planting. Contact your Allendale Representative to work out a pricing strategy. Weather forecasts have cooled off for the eastern portion of the cornbelt during the 10 to 15 day period where a majority of the US corn crop is expected to pollinate. Help us with the survey and let us know how corn maturity is progressing in your area. Fed Chairman Bernanke will be testifying in front of the Senate and House later this week. Traders will be watching for any hint of change in policy. Livestock markets found support on Monday from fund buying. Packer margins continue to erode with choice beef down .83 and select up .27. Pork cutout values were down .41 on Monday. The feeder cattle index was up 2.39 to 144.79. The recent USDA report has shed some light on beef supplies for the 4th quarter of 2013 and 1st quarter of 2014. They are projecting beef production to be down 5.7% and 6.1% respectively. Register Now for the July Ag Leaders Webinar on July 22, 2013.

In what timeframe will your corn tassel and pollinate? Take the survey here.

Markets as of 4:45 AM

  • Dec #Corn    +7 1/2
  • Nov #Beans   +9 1/4
  • Sep #Wheat   +5
  • Aug #Cattle  +.20
  • Aug #Hogs    +.10
  • Sep Dlr     -.08
  • Sep S&P     +.25
  • Aug Crude   +.20
  • Aug Gold    +2.20

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Managed Money Increases Shorts In Corn

Jul 15, 2013

Good Morning! Paul Georgy with early morning comments for July 15, 2013 at 5:00 am.  Grain futures are lower as buyers wane on weather change. Weather forecasts have put in a little more moisture and less heat as corn begins to pollinate across the cornbelt. Traders are looking ahead to this afternoon’s crop conditions report which many are thinking we could see a 1-2% decline in G/E from last week’s corn of 68% and soybeans of 67%. NOPA crush will be out at 11:00 am this morning. The trade estimate for June is 117 million bushels, which 13% below last year. We need to be running at 19% below last year for the entire quarter to meet the USDA target. USDA will have to recognize this old crop problem at some point. They clearly told the trade on Thursday that they will wait until new crop is established before showing the true old crop problem. The cash market will have to pay up through basis when supply is needed. The CFTC Commitment of Traders report showed managed money increased their net short positions by nearly 36,000 contracts last week while adding a few net longs to soybeans and wheat. Later this morning we will get a few important economic reports which may impact trader’s bias. Bernanke’s testimony in front of the Senate and House on Wednesday and Thursday will likely be the highlight of the week. Livestock markets are called steady to lower as product demand struggles. Boxed beef was lower on Friday with choice down 1.19 and select down 1.04. Pork cutout bounced by .73. The July contract of Lean Hogs will go off the board today which could provide support for the August contract due to its sharp discount. Subscribe to the Allendale Advisory Report the full details.

Markets as of 5:00 AM

  • Dec #Corn    -7 1/2
  • Nov #Beans   -4
  • Sep #Wheat   -11
  • Aug #Cattle  Steady-Lower
  • Aug #Hogs    Steady-Lower
  • Sep Dlr     +.22
  • Sep S&P     +1.75
  • Aug Crude   -.54
  • Aug Gold    +3.40

 

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If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

July Contract Expiration Could Provide Fireworks

Jul 12, 2013

Good Morning! Paul Georgy with early morning comments for July 12, 2013 at 5:00 am.  Grain futures are mixed with the old crop/new crop spreads expected to provide some fireworks before the July contract expires at 12 noon. Corn basis has held steady but soybean basis has been on a slide at most processors. NOPA crush data will be released on Monday which should provide a clue to accuracy of USDA’s soybean ending stocks. The USDA numbers released yesterday were as expected on the production side however they lowered demand for new crop corn and soybeans. Traders are now focused on how USDA will adjust 2013/14 ending stocks for prevent planted acres and yield. Our analysis suggests it is very possible to see an increase in corn yield on upcoming reports. Soybean yields could be the opposite due to late planting and excess moisture. We do have a long growing season ahead of us and a reason for trader’s nervousness about the weather. The hot temps forecast for the next few days (especially in the western quadrant) for the cornbelt has traders tense going home for the weekend. The wheat was dealt a bullish figure by USDA as they increased demand by 100 million bushel and raised the average price for wheat by 20 cents. Weekly export sales were strong at 1.47 mmt. Wheat demand is benefiting from the tight supplies of corn in livestock feeding areas. Argentina port workers will strike today for one day as they protest high taxes. USDA lowers 2013 beef & pork production forecasts from last month and leaves 2014 beef unchanged and raises pork production slightly. Chick placement increased as growers anticipate greater corn supplies in a few months. Some feedlots in eastern NE are reporting significant death loss from the heat and humidity they had this week. Cash cattle are still at a stand-off, bid 116-117 offers 122-123 in the south. Boxed beef values are lower with choice down .35 and select down 1.34. Pork cutout values were down 1.61. The July Hog contract will go off the board on Monday.

Markets as of 5:00 AM

  • Dec Corn    -2
  • Nov Beans   -2 3/4
  • Sep Wheat   +1 1/2
  • Aug Cattle  -.05
  • Aug Hogs    -.37
  • Sep Dlr     +.20
  • Sep S&P     +.75
  • Aug Crude   -.18
  • Aug Gold    +3.70

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Dollar Plummet Triggers Commodity Buying

Jul 11, 2013

Good Morning! Paul Georgy with early morning comments for July 11, 2013 at 5:00 am.  Grain futures are higher as double crop soybeans are at risk in the Ohio River Valley and old crop stocks very tight. Grain support is also coming from a weak dollar and traders’ risk-on attitude. Traders are expecting a neutral report. We suggest,however, that the HFT or headline traders may construe a slightly unchanged data as a sell signal. Be prepared for volatility when data is released. Weather forecasts have added more rain in the 11 to 15 day period. Temps are expected to reach 100 in the western cornbelt this weekend with no significant rain event. Crops will show further stress in the west while the rest of the cornbelt should continue to improve as more corn will be pollinating. Traders will be doing some last minute position adjusting ahead of the USDA Monthly Supply and Demand Reportwhich will be released at 11:00 CDT. The questions to answer is how much of the report will traders believe and for how long? Historically, on the July report, the USDA uses the acreage number from the June planting survey times the yield from the June S+D. If they follow their recent pattern, corn ending stocks could be near 1.9 billion bushels for 2013/14. Ethanol production numbers for week showed a 7% increase over last year. Although this is an improvement, year to date production is 8.8% below last year when USDA’s goal is a 7.2% decline. Corn and soybean basis remains very strong through first half of August. End-users are expecting harvest to begin in the south. Corn basis is 2.35 over the Sep in Hereford, TX which is causing feedlots to use hard red wheat as a substitute. Tight cash supplies and July contract expiration is providing support in the nearby contracts. Weekly export sales data will be released at 7:30 this morning. Trade estimates are as follows:

                         2012/13                      2013/14       
                      Estimates                    Estimates                        
Corn         150,000-250,000        200,000-350,000
Soybeans        zero-100,000        200,000-350,000
Soymeal    50,000-100,000           50,000-150,000 
Soyoil           5,000-20,000                     zero           
Wheat            **********              650,000-900,000
 

Livestock markets are struggling to rally as meat consumption slows during July. Cash cattle trade is at a standstill. Boxed beef was lower with choice down another 1.25 and select was up .20. Hog futures found support of a firmer cash trade due to hot weather in the forecast. Packers wanted to have a few more hogs before the heat hit. Pork cutout values were down 2.50 on Wednesday. Republicans in Congress were unable to agree upon a split-bill late yesterday so it is back to the drawing board on the Farm Bill. Rich Nelson, Allendale’s Chief strategist will be providing a YouTube discussion after the USDA Report later today.

Markets as of 5:00 AM

  • Dec Corn    +5 1/2
  • Nov Beans   +7 1/4
  • Sep Wheat   +5 3/4
  • Aug Cattle  +.02
  • Aug Hogs    -.15
  • Sep Dlr     -1.01
  • Sep S&P     +16.50
  • Aug Crude   -.69
  • Aug Gold    +34.50

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Heat in Forecast Ignites Buyers

Jul 10, 2013

Good Morning! Paul Georgy with early morning comments for July 10, 2013 at 5:00 am.  Grain futures are higher as traders prepare for the USDA report and warmer weather to move into Midwest. Outside markets are also providing a lift with the dollar down, crude oil and metals higher. Several factors have spooked the bulls this week. The weather forecasters are using the "HOT" word to describe temps later this week in the western Corn Belt where conditions are dry. Although the high temps may be around for only a few days, it may be too much for dry land corn. Producers in Nebraska are telling us the dry land corn is already being affected by the dry/hot conditions. Technical buying and fund buying is also a large factor in recent rallies. Will the funds continue to buy ahead of the USDA report? Trade averages are suggesting this upcoming report as bearish. The USDA will use the planted acreage numbers from the June 28 report. History suggests that it is not likely for them to make any significant changes to yield due to lateness of the crop. When doing the math, we would expect about 1.9 billion bushel corn carryover for 2013/14, which is almost 3 times as much as this year. Chart patterns and key moving averages are driving technical buying. Trading volume is expected to heavy going into the USDA report on Thursday at 11:00. Open interest in the July contracts is getting smaller but could lead to volatile trading before Friday’s expiration. Funds were big buyers in corn yesterday with an estimate of 18,000 contracts. They were net buyer in wheat of 3,000 contracts and soybeans of 9,000 contracts. The rally in corn has not had much effect on basis. However, soybean basis has dropped in most areas. Bean processors are shutting down for maintenance. Cattle futures are waiting to see if cash can trade steady to higher this week as we head into a seasonal slowdown in product demand. Choice beef was down .53 while select was up .72. Allendale’s Chief Strategist, Rich Nelson has done an excellent analysis on the hog market in last night’s Hog Commentary. Take time to read it. Pork cutout values were down 1.48 on Tuesday.

Markets as of 5:00 AM

  • Dec Corn    +2 1/2
  • Nov Beans   +4 3/4
  • Sep Wheat   + 1/2
  • Aug Cattle  -.02
  • Aug Hogs    +.15
  • Sep Dlr     -.21
  • Sep S&P     -1.5
  • Aug Crude   1.28
  • Aug Gold    +6.90

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Buyers Back In Grain Futures

Jul 09, 2013

Good Morning! Paul Georgy with early morning comments for July 9, 2013 at 4:45 am.  Grain futures are higher on follow-through buying, positive fundamental news and an improved chart picture.  Cash markets are considerably higher than the July futures with only 3 full sessions left to trade. This is likely to create some excitement in the July contract going into expiration on Friday at Noon. Traders coming back from a holiday week were surprised by the announcement of active grain and soybean sales. The long-term weather forecast has added more heat and less rain to the cornbelt at an important time of the production cycle. Traders are also faced with an oversold technical picture and a USDA Report on Thursday morning at 11AM. The 2013/14 USDA balance sheet should show a large ending stock for corn and soybeans. History tells us the USDA will be using the acreage numbers released on June 28 as reported. They could change the yield but when they change yield in June it is unlikely to see another change in July during late planting years. Old crop ending stocks numbers are likely to see slight adjustments in corn and soybeans. Trade average estimate for wheat is projecting a decline of approximately 30 million bushels in ending stocks.  Wheat harvest is behind normal due to rains across the Ohio River Valley. Harvest delays are also creating concerns about the planting of double crop soybeans. The November soybean futures had an outside day reversal on the charts Monday, watch for continued strength. Livestock traders are disappointed by holiday week meat movement. Retailers are securing product now for the end of July into early August which is generally a lower demand period than early summer. Export sales for pork during May were down 4% from previous year. Pork cutout values on Monday were up .36. Boxed beef came under pressure on Monday with choice down 1.49 and select down 2.60.

Yesterday’s poll question was: What will USDA project for corn yield on Thursday’s report?

Below 145–0.66%
145-150–6.58%
150-155–25%
155-160–54.61%
Above 160–13.16%

 

Markets as of 4:45 AM

  • Dec Corn    +7 1/4
  • Nov Beans   +15 3/4
  • Sep Wheat   +6 3/4
  • Aug Cattle  +.07
  • Aug Hogs    6 3/4
  • Sep Dlr     +.07
  • Sep S&P     +7.25
  • Aug Crude   -.15
  • Aug Gold    +16.00

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Post-Holiday Should Improve Volume

Jul 08, 2013

Good Morning! Paul Georgy with early morning comments for July 8, 2013 at 5:15 am.  Grain futures are higher on short covering after Friday’s low range close. The tight supplies of old crop corn and soybeans will continue to impact markets this week. Farmers are strong holders of grain while basis sets record highs as end-users switch bids to August soybeans and September corn. The July contract goes off the board on Friday. The July USDA Supply and Demand report will be released on Thursday at 11:00 am. Expect the USDA to use the acreage numbers from the June 28 planting report. Be alert for further adjustments to yield to reach realistic ending stocks for corn. The crop conditions report this afternoon should show an improvement of 1 to 2% on last week’s 67%. Weather conditions have to be seen as positive for corn as there is no extreme heat through the third week of July. This should allow for approximately 50% of the US corn crop to be pollinated. Soft Red Wheat harvest is being slowed due to rain and now has traders concerned double crop soybeans will not be planted. Outside markets are continuing to deal with the slowdown of the Chinese economy and the turmoil in Egypt. The US Dollar has backed off of overnight highs. The CFTC Commitment of Traders Report has been delayed until this afternoon due to the holiday. Cash cattle ended the week 1.00 lower at 119. Packers are concerned about beef demand going into the proverbial "Dog Days of Summer". Choice beef was down 1.39 and select was down .74 on Friday. Pork packers have enough inventory to start the week however weaker pork values could weigh on cash trade. Markets ready hog supplies remain tight as pork cutout values were down .13 to close out a holiday week.

What will USDA project for corn yield on Thursday's report? Click Here to take our one question poll.

Markets as of 5:15 AM

  • Dec Corn    +2
  • Nov Beans   +5 3/4
  • Sep Wheat   +2
  • Aug Cattle  Steady-Higher
  • Aug Hogs    Steady-Higher
  • Sep Dlr     -.11
  • Sep S&P     +9.50
  • Aug Crude   -.18
  • Aug Gold    +15.5

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Short Covering Supports Grain Futures

Jul 03, 2013

Good Morning! Paul Georgy with early morning comments for July 3, 2013  at 5:00 am. Grain futures are higher as traders even up positions before the holiday. Trading volume this week has been very light and would appear to be more of the same going into the 12 noon close today. We must, however, plan ahead for July 5th. Historically corn and soybeans have sharp moves on the first trading day after the July 4th holiday. Changes to the weather forecast and world economic situations need to be kept in mind. When we start trading again on Friday morning the long-term weather forecasts will hit the pollination slot for the majority of late planted corn. The unrest in Egypt will be monitored closely as the Suez Canal is a major shipping passage way for oil. Tight supplies of old crop corn and soybeans will continue to impact nearby contracts. The July contract will go off the board on July 12th, one week from Friday. Some are suggesting Sept contracts could rise to the level of July due to late planting. Moore Research data suggests otherwise. Allendale’s staff is working on option strategies which will provide down side protection and upside opportunities. A lot of numbers are being crunched after the planted acreage report and ending stocks could jump to over 2.0 billion bushel for corn when adjusting for yield and export demand. Soybean ending stocks could push 300 million bushel. Allendale’s price targets can be found in the Allendale Advisory Report. Livestock futures are being impacted by activity in the outside markets and a slowdown of demand from the retailer. Boxed beef was higher on Tuesday with choice up .46 and select up .84. Pork cutout values were down 1.50. The CME Feeder Cattle Index was up .86 to 140.08. We wish everyone a safe and enjoyable Independence Day Weekend. Our next Wake-up-Call will be Monday Morning. Tune into the "Morning Coffee" on YouTube Friday before the opening.

Markets as of 5:00 AM

  • Dec #Corn    +5
  • Nov #Beans   +16
  • Sep #Wheat   +12 1/2
  • Aug #Cattle  +.12
  • Aug #Hogs    -.35
  • Sep Dlr     -.10
  • Sep S&P     -8.25
  • Aug Crude   +1.46
  • Aug Gold    -.05

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

Grains Bounce After Sharp Sell-Off

Jul 02, 2013

Good Morning! Paul Georgy with early morning comments for July 2, 2013. Grain futures are higher on short covering. Farmer selling of old crop corn on an early week rally caused ethanol and processors bids to bounce around on Monday. The weakness in basis, in turn, caused profit taking in the bull spreads in corn yesterday. This morning markets are being led higher by nearby contracts. Trading in the July contracts will be very treacherous as the last trading day approaches. Corn conditions improved 2% last week as trade was expecting. The G/E is now 67% versus a year ago of 48%. Soybeans improved by 2 % to 67% G/E versus 45% last year. Soybean planting increased 4% to 96% complete. The double crop bean planting is slow due to harvest delays of wheat which is only 43% complete compared to 52% average. Domestic soybean basis is strong and traders are wondering how the USDA is going to deal with the current pace of crush and exports. Traders will be waiting for Informa’s estimates on Wednesday. Russia says their wheat harvest is moving along due to improving weather which is causing lower values for wheat exports in Black Sea ports. International Grain Council said they expect a 25% rise in maize stocks even with strong demand. Funds were net seller of 14,000 corn contracts on Monday and sold a net 4,000 soybean contracts. Rich Nelson did an excellent presentation yesterday afternoon on USDA acres report. It is viewable here for subscribers and short clips will be made available to everyone later today. Livestock futures are receiving some benefit from strength in outside markets and the lower feed cost. The feeder cattle index was up 1.49 to 139.22. Boxed beef was lower as retailers are done buying for the holiday; choice was down .86 and select was down 1.37. Pork cutout values were down 1.54. Product demand is likely to struggle after July 4th as historically it is a time of increased vacation and less consumption. Markets close at noon on Wednesday and do not reopen until Friday morning.

 

Yesterday’s poll question was: How many of the 97.379 million corn acres will be lost due to Prevent Plant?

1-2 million acres–26.69%
2-3 million acres–34.8%
3-4 million acres–25.34%
Over 4 million acres–13.18%
Thank you for voicing your opinion!

 

Markets as of 4:45 AM

  • Dec #Corn    +3 3/4
  • Nov #Beans   +5 1/4
  • Sep #Wheat   +8 1/2
  • Aug #Cattle  +.42
  • Aug #Hogs    -.35
  • Sep Dlr     +.16
  • Sep S&P     +1.75
  • Aug Crude   +.09
  • Aug Gold    +2.60

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

USDA Report Affects Overnight Trade

Jul 01, 2013

Good Morning! Paul Georgy with early morning comments for July 1, 2013  at 5:15 am. Grain futures are mixed as they continue to react to the USDA Reports. Tight supplies of old crop are supporting nearby contracts while weather is weighing on deferred months. Many are looking at the planted acreage number as unbelievable. We must remember that the data for Friday’s report was taken from a survey of producers in early June at a time when producers still believed they were going to get their crops in the ground. Now we will have to wait until August Supply and Demand Report before we likely see adjustment. It has been Rich Nelson, Allendale’s Chief Strategist’s contention that acreage this year is not as import as yield. Harvested acres are projected to get back to normal compared to last year’s low number. Friday’s data gives the USDA a lot of wiggle room on upcoming reports. We’d like to know your thoughts, take our one question poll below. Traders will be looking for an improvement for corn and soybean conditions of 1 to 3 % in G/E on this afternoon’s report. Cash corn and soybean basis is strong. The weather forecasts are positive to crop growth as temps will be in the 70’s and 80’s this week with scattered showers. Some early planted corn is starting to tassel. We have a short trading week ahead of us. The Hogs and Pigs Report could be viewed as a little friendly. We would look for a moderate rebound in futures this morning as the hog herd was found to be a little smaller. In the big picture, producers have an incentive to expand their hog operations as grain prices trend lower. Pork cutout values were up .30 on Friday. Boxed beef was mixed on Friday with choice up .12 and select down .47. Cash cattle traded at 120, steady with previous week. Agricultural futures markets observe Independence Day by closing early on Wednesday (noon) and reopening on Friday morning at the normal pit opening (grains 8:30 am and livestock 9:05 am). Outside markets are firmer as we start a new month.

How many of the 97.379 million corn acres will be lost due to Prevent Plant? Click Here to Participate

Markets as of 5:15 AM

  • Jul #Corn    +1 1/4
  • Jul #Beans   +13 1/2
  • Jul #Wheat   +5
  • Aug #Cattle  Steady-Higher
  • Jul #Hogs    Steady-Higher
  • Sep Dlr     -.13
  • Sep S&P     +9.00
  • Aug Crude   +.47
  • Aug Gold    +18.50

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538 or email us at service@allendale-inc.com

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