Jul 25, 2014
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February 2014 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.
 

Soybeans Send Strong Technical Signal

Feb 28, 2014

Good Morning! Paul Georgy with early morning comments for February 28, 2014 at 4:45 am.  

Grain futures are mixed as soybeans are getting follow through technical selling. Corn and wheat finding support from spreading. Traders are still waiting for demand news at 8:00 am.

Thanks to all who attended the Monthly Allendale Ag Leaders Webinar last evening. There was great attendance as the Allendale team discussed some very important issues.

What a day of volatility on Thursday! There were a large amount of contracts traded prompted by the USDA announcement of weekly sales of 327,000 tonnes of 2013/14 soybeans. These sales raised the total soybean sales to 106% of USDA export target.

The soybean complex will likely find support on correction until sizable cancellation announcements occur. Floor sources are suggesting a major commercial was bear spreading in the July/November soybeans yesterday. Could that be an indication cancellations are getting closer to reality?

Most of the soybean contracts had major price reversals on Thursday. However the November contract had a large outside day down which could be significant unless a rally occurs within a couple of days.

Funds were estimated to have sold a net 13,000 corn, 8,000 wheat and 6,000 soybean contracts yesterday.

The unrest in Ukraine has traders nervous about exports out of that region. Egypt bought wheat from Black Sea Region as it was $10 to $15 cheaper than US.

Deliveries were minimal on the first notice day for March contracts, corn 4, soybeans 17 and wheat 0.

The US Dollar is down sharply this morning as the Euro rallies on higher inflation data out of EU.

Cash cattle traded at 150 in the south and 152 in the north this week. Product values have improved but not enough to turn packer margins to positive. Beef cutout values were higher on Thursday with choice up 2.46 and select up 2.33. The CME Feeder Index is 170.76.

Hog futures are on fire led by the April contract. Traders have been short April and long the summer contracts anticipating the effects of PEDv would not hit until late second quarter. The rising beef prices have provided improvement in pork product demand. Russia said they were going to resume pork purchases from the US. Pork cutout values are up 2.30.

Allendale Annual Planted Acreage Survey is going right now. Please call us or go to www.allendale-inc.com and fill out the survey.

Markets as of 4:45 AM

  • May Corn    +1 1/2
  • May Beans   -5
  • May Wheat   +3 1/2
  • Apr Cattle  -.10
  • Apr Hogs    +.67
  • Mar Dlr     -.40
  • Mar S&P     -1.25
  • Apr Crude   -.04
  • Apr Gold    -1.80

Chart of the Day

Daily Chart

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

Bulls Waiting For More Feed!

Feb 27, 2014

Good Morning! Paul Georgy with early morning comments for February 27, 2014 at 4:45 am.  

Grain futures are mixed with old crop soybeans near 14.00. Corn and wheat lower on profit taking and spreading.

All eyes are on the weekly export sales report at 7:30 and the daily USDA export data at 8:00 am. Has there been any cancellation in soybeans? Traders believe it is not a question of if, it is a matter of when and how much. The trade estimate for weekly export sales is very aggressive for soybeans at 400,000 to 800,000 tonnes. The corn sales estimate is 475,000 to 775,000 tonnes and wheat is 300,000 to 500,000 tonnes.

Argentina approves the additional export of 500,000 tonnes of wheat for the 2013/14 crop year.

Egypt’s GASC is seeking a couple of cargoes of wheat however it is likely none of it will be from US.

Corn and soybean basis has held steady with early week values as farmer selling has slowed.

A Reuter’s article suggests investors are wary of commodity gains despite new money. 2013 was a hellish year for commodity investments. http://reut.rs/1hgkDku

Funds sold a net 6,000 wheat contracts, bought 8,000 contracts in soybeans and were even in corn.

First notice day for March contracts is Friday. The sharp rally in soybeans has created end of month margin clerk pressure at FCMs for retail traders to exit positions or get money in now. This situation should be relieved by the weekend.

Allendale’s Monthly Webinar is this evening at 7:00 pm. We will be covering Planting Weather, Acreage and a Technical Update. Sign up today, it is free! Click here for details. This will be your first chance to meet Ryan Martin, a meteorologist and a new addition to the Allendale Team. You will have access to his daily US and International weather outlooks next week.

The cattle market is on fire! Cash traded at 152 in NE yesterday which is up 7.00 from last week. February Live Cattle contract goes off the board on Friday at noon. We are in the period where supplies were expected to be tight based on last fall’s placements. Supplies are expected to increase going into summer months. Cutout values were higher with choice up 2.45 and select up 2.69. The CME feeder Index is 170.27.

Lean Hog futures continue to set new contract highs as fund buying and concern over supply of market ready hogs due to PEDv as early as April are the catalysts. The technical picture is suggesting an overbought condition. Watch for quick, sharp correction in futures. The cash market is strong and the pork cutout value is down .01.

Allendale Annual Planted Acreage Survey is going right now. Please call us or go to www.allendale-inc.com and fill out the survey.

Markets as of 4:45 AM

  • May Corn    -2
  • May Beans   +1 1/4
  • May Wheat   -2
  • Apr Cattle  +.60
  • Apr Hogs    +.57
  • Mar Dlr     +.08
  • Mar S&P     -8.25
  • Apr Crude   -.08
  • Apr Gold    +4.20

Chart of the Day

Daily Chart

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

Shorts Covering Fuels Rally!

Feb 26, 2014

Good Morning! Paul Georgy with early morning comments for February 26, 2014 at 4:45 am.  

Grain futures are lower as traders take some profits as they wait for more demand news.

The announcement by USDA that an additional 568,000 tonnes of soybeans were sold has traders asking why US origin when South America soybeans $1.00 per bushel cheaper. Most still believe it is a matter of time until cancellations or switching of origin will begin.

We need your help! Share your 2014 planting intentions in our 25th Annual Acreage Survey, now thru March 7th.

A dominant force going into the first notice day and last trading day of February is margin liquidation. The margin clerks are working hard to clean up margin calls before the end of the month which means pay-up or get out of short positions.

Expect to see more rolling of March positions to a deferred contract going into first notice day on Friday.

Chinese crush margins are deep in the red due to a slowdown in demand for meal from the bird flu-stricken poultry industry.

Allendale’s Monthly Webinar is Thursday evening when we will be covering Planting Weather, Acreage and a Technical Update. Sign up today, it is free! Click here for details. Ryan Martin is a meteorologist and a new addition to the Allendale Team. You will begin getting his daily weather summaries next week.

Brazil’s #2 soybean producing state of Parana could have lost up to 2 million tonnes, down to 14.5 million tonnes due to this summer’s drought says the state Ag Official.

Oat price limits expand to 30 cents from 20 cents for Thursday’s trade per CME. Oat prices remain strong due to the rail shipment backlog from Canada.

Turmoil remains an issue in Ukraine as the IMF wants to see stability before providing emergency funds. Turkey’s Prime Minister is under fire because of secret funds.

Though we have not started PEDv based slaughter numbers yet, the market is trading what could happen when April arrives. Week to date slaughter at 854,000 head is 30,000 over last year in the first two days of the equivalent week. The next two weeks should also hold adequate supplies. Pork cutout values were up 1.29 on Tuesday.

The packers are bidding for cattle on Tuesday which has feedlots raising offers as it would suggest they need cattle. Traders are now thinking cash cattle could trade 1.00 to 2.00 higher this week. Beef cutout values were higher with choice up .68 and select up 1.31. The CME Feeder Index is 170.32.

Markets as of 4:45 AM

  • Mar Corn    -1 1/4
  • Mar Beans   -1 1/2
  • Mar Wheat   -2 1/2
  • Apr Cattle  +.50
  • Apr Hogs    +.35
  • Mar Dlr     +.04
  • Mar S&P     +4.50
  • Apr Crude   +.26
  • Apr Gold    -2.20

Chart of the Day

Daily Chart

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

Is There A Soybean Demand Bubble?

Feb 25, 2014

Good Morning! Paul Georgy with early morning comments for February 25, 2014 at 4:30 am.  

Grain futures are lower on profit taking. Demand for soybeans, domestically and abroad, is providing underlying support to markets at CME.

Allendale’s Monthly Webinar is Thursday evening. We will be covering Planting Weather, Acreage and a Technical Update. Sign up today, it is free! Click here for details.

Cancellation or lack thereof is the major catalyst for support to the soybean complex.

Traders are currently dealing with several smaller issues which are impacting grain prices. The buying by funds, wet weather in Brazil, the USDA Ag Forum’s soybean acreage estimate and the Spring weather outlook. The next big event is the USDA Prospective Planting Report on March 31st.

A ship loader in Brazil’s number 2 soybean port, Rio Grande, is reporting an accident that will likely cause it to be down for 2 weeks.

Transportation and logistics issues continue to hamper grain delivery in Canada. The Ag Minister has met with grain companies and railways to find a solution to their woes.

The Coast guard has reopened the lower Mississippi after Saturday’s collision between a tanker barge and a tow boat that spilled crude oil.

The first day of the Allendale planting survey got us off to a great start in developing a reliable data set. We will be doing the survey until March 7th. Remind your neighbors and friends to fill out the survey. Click on Acreage Survey for more details.

The outside markets are seeing some profit taking this morning as gold and energies are lower.

Cash cattle are expected to trade steady this week. Packers should see an improvement in product as retailers stock coolers for early March featuring. Beef cutout values were higher with choice up 2.07 and select up 1.79. The CME index is 170.57.

After setting new contract highs on Monday, the Lean Hog futures at the CME are relieving some of the overbought condition. Traders are now thinking the PEDv impact could happen as early as April. Tight beef supplies could fuel pork values going into the 2nd quarter. Pork cutout values were up 1.29 on Monday.

Markets as of 4:30 AM

  • Mar Corn    – 3/4
  • Mar Beans   -5 3/4
  • Mar Wheat   -1 1/2
  • Apr Cattle  +.32
  • Apr Hogs    +.05
  • Mar Dlr     -.07
  • Mar S&P     -3.00
  • Apr Crude   -.75
  • Apr Gold    -4.90

Chart of the Day

Daily Chart

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

Planting Survey Begins Today!

Feb 24, 2014

Good Morning! Paul Georgy with early morning comments for February 24, 2014 at 4:45 am.  

Grain futures are mixed with soybeans higher, corn and wheat lower. March soybeans are setting highs not seen since Sept 2012. Tight world supplies and technical buying seem to be the drivers.

Allendale starts its annual planted acreage survey today. Please go to www.Allendale-inc.com and fill out the survey. The USDA will release their Prospective Plantings Report on March 31.

The polar vortex is expected to move down across much of the Midwest this week and as March 1 nears, farmers and traders become more concerned about spring planting. This week we have first notice day for the March contracts which could create some long liquidation.

Weather in South America is not ideal everywhere but should be adequate to stabilize crops.

The Argentine farmers holding grain off the market has set the stage for possible government intervention as harvest should be getting underway in the next couple of weeks.

There was no confirmation of cancellation on Friday with about 4 million tonnes of unshipped soybeans to China. Ethanol and soybean processing plant margins are favorable and expect good demand at least until roads and weather allow farmer movement.

The CFTC Commitment of Traders has managed funds as net buyers of 10,912 contracts to make them long about 45,000. Many traders following fund activity believe they could have bought as much as 50,000 contracts of corn late last week. Managed Money funds raised their long positions in soybeans by 19,366 and reduced short positions in wheat by 8,823 contracts.

From the G20 meeting in Sidney, Australia, the largest nations in the world vowed to increase GDP by 2% over the next 5 years. The dollar is lower and gold is up.

Beef values were lower with choice down .57 and select down .48. The Cattle on Feed report was negative as placement and on-feed numbers were higher than trade was expecting. Early calls are for cattle to open .30 to .50 lower. CME Feeder Index is 170.77.

Last week was great for the hog market. Cash markets picked up $7, wholesale pork gained $3, and all 2014 futures made new contract highs. Pork cutout values were up .35 on Friday. We would expect hogs to open lower in sympathy with cattle.

Markets as of 4:45 AM

  • Mar Corn    -4 1/2
  • Mar Beans   +11
  • Mar Wheat   -5 1/2
  • Apr Cattle  Lower
  • Apr Hogs    Steady-Lower
  • Mar Dlr     -.11
  • Mar S&P     +1.00
  • Apr Crude   -.10
  • Apr Gold    +10.30

Chart of the Day

Daily Chart

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

Where Did 6 Million Acres Go?

Feb 21, 2014

Good Morning! Paul Georgy with early morning comments for February 21, 2014 at 4:45 am.  

Grain futures are slightly lower in a narrow range ahead of the USDA’s data release. All eyes will be on the newswires around 7:00 am eastern time when USDA is expected to release their balance sheets for 2014 production. Yesterday they gave us acreage projections which were less than what trade analysts had expected. Corn expected plantings were 92 million acres and soybeans were 79.5 million acres. There seems to be 5 to 6 million acres missing in the mix. Yield will be the key number to look for this morning.

No major change in ethanol production as it is still over USDA’s expectation. There are more traders thinking that EPA may not lower the 2014 RFS. Ethanol production is still very profitable, which is a major driver with or without a mandate change.

More rumors are circulating that Chinese meal demand is waning. There is talk that the latest bout of bird flu has hit China’s largest poultry producer hard which could put them into bankruptcy.

Traders are still waiting for confirmation of some cancellations by China. Weekly sales report is out at 7:30 this morning. Trade estimates are:  Soybeans 150,000 to 500,000 tonnes, Soymeal 75,000 to 200,000 tonnes, Soyoil 10,000 to 50,000 tonnes, Wheat 400,000 to 700,000 tonnes and Corn 700,000 to 1,250,000 tonnes.

The outside markets are concerned about the unrest in Ukraine where the US and EU are considering some type of sanction. Social media is reporting unrest breaking out in Venezuela.

G-20 finance ministers and central bankers will gather in Sydney this weekend. Existing home sales are expected to fall to new 1-1/2 year low when reported this morning at 9:00 am. The US Dollar, the S&P and gold are higher this morning.

PEDv cases have reached a record high of 301 last week. Pork producers are hoping for a break in the winter weather to slow down the spread of this virus. Futures traders reversed positions and set new contract highs in yesterday’s session. Pork cutout values are up 2.72.

Cattle on Feed report will be released this afternoon at 2:00 pm. Beef cutout values are mixed with choice up .47 and select down .13. Cash trade is expected to be steady to higher this week with bids at 142 and offers at 145. The CME Feeder Index is 171.02.

Markets as of 4:45 AM

  • Mar Corn    – 1/4
  • Mar Beans   -1 1/2
  • Mar Wheat   -1 1/4
  • Apr Cattle  +.30
  • Apr Hogs    +.70
  • Mar Dlr     +.10
  • Mar S&P     +2.75
  • Apr Crude   -.20
  • Apr Gold    +3.80

Chart of the Day

Daily Chart

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’s Outlook ConferenceFor 2014 Starts Today!

Feb 20, 2014

Good Morning! Paul Georgy with early morning comments for February 20, 2014 at 4:16 am.  

Grain futures are mixed with soybeans higher and corn and wheat lower. Market influences are short covering, the worry about winter wheat crop conditions and the lack of announcements of soybean cancellations.

The Ag Outlook conference held in Washington, DC by the USDA begins today. Traders are expecting some market moving headlines to come out of that forum. Their full balance sheet, including ending stocks, will be released Friday when the first of the outlook speeches are given. Reuters took an informal analyst poll ahead of the Chief Economist speech on USDA acreage numbers, the trade is looking for 92-93 million for corn, 80-81 for soybeans, and 55-55.7 wheat. Allendale’s submission was 93.0 for corn (-2.4), 81.6 for soybeans (+5.1), and 55.7 for wheat (-0.4).

Weekly export sales data will be released Friday morning due to the holiday on Monday. Traders are waiting for some cancellation or switching by China to South America. We have no confirmations yet from USDA.

Cash bids for soybeans and corn were mostly steady on Wednesday as farmers were not interesting in selling after futures rally.

The unrest in Ukraine has caused some of the international grain traders to close their offices in Kiev due to the unrest. Ports remain open as violence seems to be confined to the capital city.

Cattle on Feed report for February will be released on Friday at 2:00 pm. Traders are expect a decline in the on-feed number to 95.9% and marketings to be 95% of last year. Placement on average are expected to be 102.5% of last year however arguments can be made for less placements due to less cattle available. Beef cutout values are higher with choice up 1.86 and select up .77. The CME Feeder Index is 171.59.

Returning from several meetings across SD, MN and WI and having the opportunity to talk with hog producers and getting first hand experiences of the PEDv, one becomes very concerned about supplies of hogs during summer months. Heavier weight will fill some of the loss in numbers therefore competitive meats could have a big impact on how high pork price move. Pork cutout values were down .95 on Wednesday.

Markets as of 4:16 AM

  • Mar Corn    – 1/4
  • Mar Beans   +4 3/4
  • Mar Wheat   -3
  • Apr Cattle  -.25
  • Apr Hogs    +.05
  • Mar Dlr     +.15
  • Mar S&P     -2.5
  • Mar Crude   -.04
  • Apr Gold    -6.60

Chart of the Day

Daily Chart

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 Funds Return As Buyers Today?

Feb 19, 2014

Good Morning! Paul Georgy with early morning comments for February 19, 2014 at 4:35 am.  

Grain futures are trading in a very narrow range. Will managed money funds be back as buyers today after the risk-on activity that we saw yesterday?

Reporting from Marshfield, WI this morning where we have another meeting for Legend Seeds at 10:00 am at the KC Hall. We have had great turnout by producers in our 2 previous meetings with some very interesting conversation and are looking forward to another successful meeting today.

The weaker dollar and the lack of cancellations in soybeans by China had bears running for hibernation yesterday. There also was a weather forecaster calling for drought this summer which provided fuel for buyers.

Soybean basis was lower in the West where weather is not affecting movement. However eastern processors raised bids to get soybeans as producers fight ice and snow to move grain.

Funds were large buyers on Tuesday when they bought a net 10,000 corn, 11,000 soybean, 7,000 wheat, 4,000 soymeal and 6,000 soyoil contracts.

Agriculture Canada expects farmers to plant 8% more canola and 6% less wheat this year. They also expect production of both to fall as yields return to normal.

USDA Ag Forum and Outlook will be releasing their first estimates for the 2014/15 crops in a presentation on Friday.

Cash cattle are expected to trade higher this week even with packer’s margins running over $125 in the red. Supplies of market-ready cattle are still tight. Beef cutout values were higher on Tuesday with choice up 1.01 and select up 1.70. The CME Feeder Index is 171.64.

Lean hog futures are getting support from firmer cash prices but mainly due to fund or outside buying. The pig loss due to PEDv is continuing to provide support to summer contracts. The pork cutout values were up .52.

Markets as of 4:35 AM

  • Mar Corn    – 1/2
  • Mar Beans   +0
  • Mar Wheat   + 1/2
  • Apr Cattle  -.22
  • Apr Hogs    +.07
  • Mar Dlr     -.01
  • Mar S&P     -4.25
  • Mar Crude   +.18
  • Apr Gold    -5.50

Chart of the Day

Daily Chart

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

Stage Is Set For Big Production In 2014

Feb 18, 2014

Good Morning! Paul Georgy with early morning comments for February 18, 2014 at 4:30 am.  

Grain futures are higher as traders remain concerned about the size of Brazil’s soybean crop. Corn and wheat get strength from logistic problems due to weekend winter storm across Midwest.

Reporting from Mankato, MN this morning where I will be presenting to a group of producers for Legends Seeds at 10:00 AM.

Traders will be watching for cancellations this morning at 8:00 as exports continue to run well above the USDA estimate.

Later in the week, USDA will release their first estimate for the 2014 crop production. Their release is expected at 6:00 am on Friday. Traders are now expecting big production estimates after the release of their baseline data last week.

The export shipments release at 10:00 am this morning will be key data to traders.

AgRural cuts Brazil’s soybean production by 1.8 mmt to 87 from 88.8 mmt. They attribute the dry weather as the factor for drop in production. AgRural also suggests Mato Grosso is now 37% complete in soybean harvest.

Argentine soybean producers are now concerned about caterpillar infestation after recent rains cause crop damage.

NOPA crush data will be released this morning at 11:00 am. Trade estimate is for soybean crush to be 162.4 million bushel during January.

Boxed beef cutout values were higher on Monday with choice up 3.30 and select up 2.06. The CME Feeder Index on Friday was 171.58.

Pork cutout values were up 1.06 on Monday. Expect livestock futures to open steady higher this morning.

Markets as of 4:30 AM

  • Mar Corn    +1 1/4
  • Mar Beans   +11 1/4
  • Mar Wheat   +3
  • Apr Cattle  Steady-Higher
  • Apr Hogs    Steady-Higher
  • Mar Dlr     +.02
  • Mar S&P     -.75
  • Mar Crude   +.59
  • Apr Gold    -3.60

Chart of the Day

Daily Chart

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

Technical Buying Supports Wheat and Soy

Feb 14, 2014

Good Morning! Paul Georgy with early morning comments for February 14, 2014 at 4:45 am.  

Grain futures are steady to higher led by the soy complex. We are seeing follow through buying in soybeans and wheat after closing above key resistance levels on Thursday.

The USDA Baseline data was released and they are going to be using a 165.6 yield for corn and 45.2 yields for soybeans as trend yield on upcoming supply and demand reports. They suggested planted acreage would be 93.5 million acres to corn and 78.0 million acres to soybeans.

The weekly export sales data showed a net increase in soybean sales which was enough to ignite buying in the soybean complex. Technical buying was also a catalyst once prices moved through the 13.40 area in the March contract at the CME. Traders will be watching the news wires at 8:00 am for any further announcements of cancellations by China.

Farmer selling of soybeans picked up yesterday which caused basis to come under pressure. Corn sales were steady but nowhere near the volume seen in soybeans.

In an interview with Reuters, Bunge CEO says they will not handle corn containing new GMO traits unless approved by China.

The Buenos Aries Grain Exchange has lowered the Argentine corn production to 23.5 mmt compared to last year of 27.0 mmt and USDA’s estimate of 24.0 mmt.

Grain markets are closed Sunday night and Monday and will open at 7:00 pm Monday evening.

Pork production last week was well above year ago levels while hog numbers were down due to heavy weight. The more seasonal weather in the forecast could help producers get current. Some are suggesting heavy weights are not a current issue but a PEDv issue. With less replacement pigs available, producers are profiting by putting on more weight. The weekly increases of PEDv cases have traders and producers concerned about summer hog supplies. Pork cutout values were up 1.20 on Thursday.

A few cattle traded at 142 while futures markets gathered support from outside influences such as weaker dollar. The price relationship of cash to futures allows room for a rally based on historical patterns. Beef cutout was slightly higher with choice up .05 and select up .13. The CME Feeder Index is 170.99.

We have several meetings scheduled for next week. Monday, Steve Georgy will be in Davenport, NE and I will be in Watertown, SD. On Tuesday we will be in Mankato, MN and Wednesday in Marshfield, WI. Call today to save a seat at 800-262-7538 or register online. Looking forward to meeting many of you in person.

Markets as of 4:45 AM

  • Mar Corn    + 1/4
  • Mar Beans   +8
  • Mar Wheat   +6 1/4
  • Apr Cattle  +.02
  • Apr Hogs    +.42
  • Mar Dlr     -.18
  • Mar S&P     +0
  • Mar Crude   -.46
  • Apr Gold    +11.80

Chart of the Day

Daily Chart

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

How Much Could China Cancel?

Feb 13, 2014

Good Morning! Paul Georgy with early morning comments for February 13, 2014 at 4:50 am.  

Grain futures are mixed as soybeans gain most of yesterday’s losses.

Ethanol production still remains above USDA’s projection after five months of the marketing year. The ethanol industry is waiting for the EPA’s final 2014 decision. Additionally, we have word that two producers are finding a home for excess production on the export market.

Trade estimates for USDA’s weekly export sales report later this morning are: wheat 450,000-750,000 tonnes; corn 800,000-1,200,000 tonnes; soybeans 600,000-950,000 tonnes; soymeal 150,000-300,000 tonnes; soyoil 10,000-50,000 tonnes.

Traders will be watching for more announcements from USDA at 8:00 am concerning further cancellation of soybeans by China. Remember that as of last Thursday total US soybean commitments exceeded USDA’s revised soybean exports forecast by 1.9 mmt.

Basis remains steady except for a soybean processor in IN who raised bids to get supply. Movement of grain remains slow as weather is making it difficult in most areas.

At 10:00 am the USDA will release its 10 year baseline data.

The Senate approved a one-year extension of the Feds Borrowing Authority. The bill now goes to President Obama for signing.

Federal Reserve Chairman, Janet Yellen sees a bigger risk of a bubble in farm land values than in stocks, under questioning on Tuesday by Rep. Frank Lucas.

Cash bids are developing at 138 to 140 in the South while beef cutout values continue to fall. Choice beef was down 1.09 and select is down .53. Choice beef has now fallen below the 210 level. There have been no deliveries against the February futures. The CME Feeder Index is 169.60.

(Reuters) – A new swine virus, distinct from the deadly PEDv pig virus, has been found in pig fecal samples taken from four different farms in Ohio during January and early February, the Ohio Department of Agriculture said on Wednesday.

News of increasing cases of PEDv is providing support to summer month hog contracts. Pork cutout values were up 1.38 on Wednesday. The February contract expires tomorrow.

Markets as of 4:50 AM

  • Mar Corn    + 1/4
  • Mar Beans   +9 1/4
  • Mar Wheat   +1 1/4
  • Apr Cattle  +.35
  • Apr Hogs    +.27
  • Mar Dlr     -.40
  • Mar S&P     -6.25
  • Mar Crude   -.72
  • Apr Gold    -4.50

Chart of the Day

Beans

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

Grain Markets Looking For New Price Driver

Feb 12, 2014

Good Morning! Paul Georgy with early morning comments for February 12, 2014 at 4:30 am.  

Grain futures are mixed in a quiet overnight session. The agricultural markets are searching for new price drivers as the next event which could create some excitement is the USDA Outlook Conference next week when they release their first projections for 2014/15. After that, we wait until March 31 when the USDA releases Acreage and Quarterly Stocks.

Lack of cancellation news by China is supporting soybean futures. Our contacts believe China has too many soybeans booked both in the US and Brazil. At what price will China sell back their contracts for the cheaper product?

The Brazilian government is hopeful of large safrina crop and CONAB (their USDA) projected their corn crop at 75.47 mmt. While down from last year’s record crop, it’s still over 5 mmt above Monday’s USDA estimate.

Cash grain movement is slow although farmers have been selling corn on the recent rally. The bitter cold and snowy conditions are limiting movement. Soybean bids improved as processors need supplies during this cold weather. Crush margins are positive due to strong meal demand.

The House of Representatives passed an extension to the debt ceiling for 1 year. The Senate is expected to vote tomorrow.

Chart analysts are watching the 5.90 area in March wheat. A close above that level suggests a move to 6.10.

Beef cutout values were sharply lower again on Tuesday with choice down 2.02 and select down .85. There were no deliveries of cattle against the February futures. The CME Feeder Index was 169.33. Live cattle futures were higher on Tuesday with follow through overnight on fund and technical buying. The cash and futures markets are moving toward a more historical relationship as it is normal for April futures to be at a premium to live prices.

Warmer weather in the forecast has lean hog traders expecting a larger run of hogs becoming available. Product was under pressure on Tuesday as cutout values were down .33. April futures are carrying about a $10.00 premium to the cash index with the February contract expiring this week.

Markets as of 4:30 AM

  • Mar Corn    -1 1/4
  • Mar Beans   -1 1/4
  • Mar Wheat   + 3/4
  • Apr Cattle  +.47
  • Apr Hogs    +.15
  • Mar Dlr     -.10
  • Mar S&P     +4.00
  • Mar Crude   +.72
  • Apr Gold    -3.00

Chart of the Day

Beans

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

When Will Cancellations Be Reported?

Feb 11, 2014

Good Morning! Paul Georgy with early morning comments for February 11, 2014 at 4:30 am.  

Grain futures are mixed as traders adjust positions after yesterday’s report.

The USDA report, released yesterday, had something for everybody. The reduction in ending stocks for corn was made by a quick pencil adjustment in exports. They made no change to feed and residual and will likely not until the April report. World stocks were lowered because of the US adjustment.

Soybean traders are now concerned that cancellations are coming. There is talk that 2 to 10 cargoes are cancelled or shifted to South America this week. The USDA did not change ending stocks in soybeans which is causing some profit taking. All eyes are now on the 8:00 am daily export updates.

The wheat market is finding support from the report most likely due short covering. There is a large spec position in wheat as traders have been selling wheat against long positions in other contracts. Traders are now waiting for the March 3rd conditions report for Kansas. The first weekly conditions report is due March 10.

Farmers have increased sales on the rally in corn. End users have a reasonable supply and basis is drifting lower.

The next major information from USDA will come when they release the 2014 corn and soybean outlook later this month.

On the economic front, the Republicans hope to hold the debt ceiling vote on Wednesday.

Livestock markets are quiet as they try to work through conflicting fundamental news. Beef cutout prices stabilized on Monday with choice up .39 and select down .18. Cash cattle are expected to trade 1.00 to 2.00 this week. The CME Feeder Index is 169.31. Pork cutout values were up .72 on Monday.

Markets as of 4:30 AM

  • Mar Corn    – 3/4
  • Mar Beans   -3 3/4
  • Mar Wheat   +2 1/2
  • Feb Cattle  -.15
  • Feb Hogs    -.10
  • Mar Dlr     -.11
  • Mar S&P     +8.50
  • Mar Crude   +.30
  • Feb Gold    +9.40

Chart of the Day

Beans

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 Slows Movement In Eastern Cornbelt

Feb 06, 2014

Good Morning! Paul Georgy with early morning comments for February 6, 2014 at 4:30 am.  

Grain futures are higher in very narrow trading ranges. Weather, technicals and lack of grain movement are providing underling support.

We had a great producer turnout at the LG Seeds meeting last night in Wisconsin Dells. They were very interested in the outlook and strategies that were presented.

Ethanol production is running 11% over last year’s pace which is above USDA’s expectation of an 8% increase. Margins still appear good at 35 cents per gallon however our model does not take into account for the sharp rally in natural gas prices.

Traders are looking for some indication of China starting to cancel or switch soybeans to Brazil. Estimates for the weekly export sales in metric tonnes are:

Wheat               500,000-750,000    
Corn                  900,000-1,200,000    
Soybeans          550,000-850,000  
Soymeal           100,000-200,000  
Soyoil                          0-30,000

Monday, the USDA will release their February Supply and Demand report in which many are expecting an increase in exports for corn and soybeans. Allendale is looking for slight reductions in corn and soybean ending stocks.

President Obama will sign the new Farm Bill on Friday after delivering a speech at Michigan State University.

Trade estimates for Friday’s Employment data are: Nonfarm payroll +184,000, and Unemployment rate 6.7%.

The U.S. dollar will make steady gains against major currencies this year as a recovery in the world’s largest economy gathers pace and gives the Federal Reserve room to wind down its stimulus program, a Reuter’s poll found.

(Reuters) – Argentina probably won’t give up on strict currency controls anytime soon, using its scarce international reserves to avoid another abrupt devaluation, a Reuter’s poll found. The Argentine peso, which plunged 12 percent on a single day during the recent global, emerging market sell-off in late January, will probably weaken at a steady pace towards year-end to 10.70 per dollar, according to the median forecast of 13 economists and strategists polled worldwide.

Livestock futures are finding support from oversold conditions and a weaker dollar. Cash cattle traded at 141 this week which was 3.00 to 4.00 lower than last week. Packers were bidding 139 late on Wednesday. Beef values were lower with choice down 3.85 and select down 2.58. The CME Feeder Index is 170.50.

Hog weights are showing signs that they have topped for the season. This is suggesting hog producers are getting current. Hog supplies could become much tighter as we go into the spring due to the PEDv. Technical resistance is 96.40 (contract highs) in the April contract. Pork cutout values are down .09.

Markets as of 4:30 AM

  • Mar Corn    +1
  • Mar Beans   + 1/4
  • Mar Wheat   + 3/4
  • Feb Cattle  +.20
  • Feb Hogs    +.10
  • Mar Dlr     +.07
  • Mar S&P     +9.50
  • Mar Crude   +.46
  • Feb Gold    +2.10

Chart of the Day

Beans

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

Rally Opens Bin Doors

Feb 05, 2014

Good Morning! Paul Georgy with early morning comments for February 5, 2014 at 4:30 am.  

Grain futures are steady to lower. We are seeing some profit-taking after yesterday’s rally.

The rally in grains started with supportive news out of the winter wheat area. The USDA dropped the good to excellent rating of winter wheat in several key producing states. Winter snow storms and extreme cold continue to hamper grain movement. The fundamental news was enough to trigger technical buying in corn, soybeans and wheat. Key moving averages, horizontal resistance and oversold conditions all played into the sharp rally yesterday. Now the question is, can the technical traders and money managers continue to support markets as farmers sell this rally? Stay in touch with your Allendale broker for advice.

The economic problems in Argentina are creating concern whether or not they will be able to deliver old crop meal to the export market. Farmers there are holding onto soybeans as a way to fight rapid inflation and devaluation of the currency.

Cash grain buyers are reporting a pickup in farmer selling. Basis levels for corn in NE fell to the lowest levels in 2 years. Decatur processor soybean bids dropped 2 cents.

The Senate passed the Farm bill yesterday and it now expected to go to the President for signature on Friday.

Cold weather in Ukraine caused maize delivery problems in January and is prompting many buyers to turn elsewhere. Total shipments were down near 40% from December to January.

Informa lowers Brazil corn production to 66.55 which is down 1 mmt from their last estimate. They also lowered Argentina corn and soybeans while raising Brazil soybeans to 89.7 mmt.

A few cash cattle traded this week at 143 in the South. There also were a few head traded between 140.50 and 143 in IA. Beef cutout values were mixed with choice up .40 and select down .21. The CME Feeder Index is 170.99.

Iowa State University’s veterinary diagnostic lab has found a new variation of the PEDv on IL and MO farms. Cash hogs are steady. Pork cutout values were up .97.

Markets as of 4:30 AM

  • Mar Corn    -1 1/2
  • Mar Beans   + 1/4
  • Mar Wheat   -4 1/2
  • Feb Cattle  -.17
  • Feb Hogs    +.37
  • Mar Dlr     +.01
  • Mar S&P     -.50
  • Mar Crude   +.89
  • Feb Gold    +6.20

Chart of the Day

Beans

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 Corn Go to $5.00?

Feb 04, 2014

Good Morning! Paul Georgy with early morning comments for February 4, 2014 at 4:30 am.  

Grain futures are quiet in a narrow range. Corn and soybeans are slightly higher and wheat is lower.

Corn production in 2013 was a record. Early production estimates for 2014 suggest another year where trend yield and lower planted acreage combine for another big crop. Therefore price will be determined by demand and availability of corn. Studies we have done on basis suggest farmers should take advantage of premiums early in the marketing year when a large crop is in producer’s hands. Talk to your Allendale Representative about the full analysis of this study. Futures however can be driven by outside forces non related to a specific grain.

Traders will be watching outside markets and technical chart points as indicators during the next several weeks as fundamental news remains redundant. Many are watching the weakness in the stock market and suggesting money has to go somewhere and it could be into cheap grains. Therefore if a rally ensues in the grain complex it is likely to come from outside forces. Stay close in touch with Allendale’s staff to keep you informed.

The ISM manufacturing index plunged in January, falling from 56.5 to 51.3. This is only the 4th time the past 20 years that the ISM has fallen more than five points.

Cold temps are hampering movement of grain, therefore driving prices up to entice delivery. South America is a little drier which actually is good for harvest and movement of grain. Port loading facilities are very active as the major ports are dry. Their facilities are uncovered and have to shut down when it rains.

Barge movement on the Illinois and Mississippi rivers are being limited to much smaller tows due to ice in and around locks.

Traders will be keeping an eye on the upcoming export sales reports as some are saying that the recent buying by Spain could be switches from the Chinese buying on our books.

Beef product values are sliding after the sharp rally in early January. Futures traders are looking at comparisons of cash to futures and historical tendencies. Normally at this time of year the April futures are $5.00 premium to cash, currently the futures are $5.00 under cash. This allows room for further cash adjustments while futures could find support. Beef cutout values are lower with choice down 3.40 and select down 5.43. The CME feeder Index is 171.04.

 Weather is creating havoc for the pork producer again this week. It is not allowing for hog barns to get current. Pork cutout values are up 1.25.

Markets as of 4:30 AM

  • Mar Corn    + 1/4
  • Mar Beans   +2 1/2
  • Mar Wheat   – 3/4
  • Feb Cattle  +.12
  • Feb Hogs    +.17
  • Mar Dlr     +.11
  • Mar S&P     +7.00
  • Mar Crude   +.26
  • Feb Gold    -6.10

Chart of the Day

Beans

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

Markets Getting Ready for Next Monday’s Report

Feb 03, 2014

Good Morning! Paul Georgy with early morning comments for February 3, 2014 at 4:45 am.  

Looking ahead for this week, traders will be getting positioned for next Monday’s February USDA Supply and Demand report. Of course the focus will be on the export number in soybeans and just how tight USDA will make the soybean ending stocks for 2014. The House of Representatives discussion of the debt ceiling will heat up this week in Washington. The new Fed Chairman Janet Yellen will be officially sworn in today. Several Fed officials will be giving speeches this week.

The March contract of corn was down 4 ½ cents last week while the weekly export number was a positive surprise. Ukraine and Argentina have economic issues which allow buyers to go to US for corn needs.

Soybeans were down only 2 cents for the week. Traders are struggling with the US exports which are running 105% of USDA’s balance sheet forecast and the good rains for the soybean growing area in Brazil and Argentina. Soybean prices continue to slide at Brazil ports.

Wheat exports were good but warmer temps in the US growing areas with possible snow cover before next the cold snap continues to weigh on prices. March wheat was down 11 ¾ for the week.

Managed funds last week reduced short positions in corn by 7,208 contracts. They reduced long positions in soybeans by 5,530 contracts. Their short positions in wheat were increased by 5,930 contracts.

All Cattle and Calves, were counted at 87.730 million head, 1.8% smaller than last year. That is the smallest herd since 1951. Rich Nelson, Allendale’s Chief Strategist says, "This is not a surprise. Keep in mind the herd size in no way means we have the smallest beef production since 1951. This year’s production will be the smallest since 1993." Beef cutout values were sharply lower on Friday. Choice was down 7.26 and select was down 4.94. The CME feeder Index is 171.12.

A Russian official indicated they will restart US imports of turkey. He suggested they "may" also restart imports of US pork that has been banned since early last year. Pork cutout values were down 2.19.

Thanks for all of the positive comments about the Allendale AgLeader’s Conference. We enjoyed the preparation and the chance to share our vision for 2014. Those who did not have a chance to attend the live presentation can purchase the recorded version today.

Anyone in the Wisconsin Dells area on Wednesday evening is invited to an LG Seeds meeting where is will be presenting some of the highlights from this year’s AgLeader’s conference. Reservations are required, see information at www.allendale-inc.com.

Markets as of 4:45 AM

  • Mar Corn    +1 1/2
  • Mar Beans   -3 3/4
  • Mar Wheat   – 1/2
  • Feb Cattle  Steady-Lower
  • Feb Hogs    Steady-Lower
  • Mar Dlr     -.15
  • Mar S&P     -4.00
  • Mar Crude   -.30
  • Feb Gold    +7.50

Chart of the Day

Beans

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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