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May 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.
 

Did We Sell More Old Crop Beans Last week?

May 30, 2014

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

Grain futures are lower. Wheat is set to close out the month with the largest loss in 3 years due to easing geo-political concerns. Planting progress and good weather prospects weigh on corn and beans.

The main region of weather concerns in the world is Russia where their major growing districts are getting dry. Most of the weather models have been fairly consistent in forecasting continued dryness for this region of the world. The GFS model may be inconsistent with rains (puts them in one run then takes them out the next). The Euro and Canadian models have been a lot more consistent with the dryness.

Traders are struggling with old crop bean supply tightness in the US. However the export market spreads are again suggesting South American soybeans will work in the US. Rallies in July futures are also creating more problems in getting letters of credit for Chinese importers 

The Chinese have a long weekend coming up and are closed on Monday for their Dragon Boat Festival.

USDA will be releasing weekly export sales at 7:30. The follow estimates are accumulated by Reuters.

                          Trade estimates            Trade estimates
                            for 2013/14                   for 2014/15
Corn               300,000-500,000          150,000-350,000
Soybeans    (-100,000)-100,000          500,000-700,000
Soymeal           50,000-150,000          100,000-200,000
Soyoil                         0-25,000                      0-10,000
Wheat                         0-200,000         200,000-400,000

Ethanol production remains very strong, as has been seen in recent weeks. Producers have strong margins so we should expect this pace to continue for a while. At current pace one would have expect USDA will have to raise ethanol usage on the supply and demand balance sheet.

Year to date ethanol production totals comparison are impressive. That will moderate in the coming weeks as the comparison against last year slips. Keep in mind last year had a surge in production at this time.

Argentina’s Congress on Wednesday eliminated local taxes on biodiesel in a bid to help an industry hit hard by the European Union’s anti-dumping measures. Biodiesel exports from Argentina are expected to plunge this year by as much as 39 percent due to tariffs imposed by the EU.

As we wrap up the month of May, hog producers around the nation are in the process of figuring up their June 1 totals for the June Hogs and Pigs report that will be released on June 27.

(Reuters) – Russia said on Thursday that it was suspending pig imports from the United States due to concerns about outbreaks of the deadly porcine epidemic diarrhea virus (PEDv).

Pork cutout value is 1.50 lower.

May cattle slaughter levels are running 5 to 7% below last year number. According to previous placement figures we should be only 3% below last year. The difference has to be attributed cattle being fed longer and heavier due to high cost of feeder cattle replacements. Beef values are weaker with choice down .66 and select down .38. The CME feeder Index is 191.75.

Markets as of 4:30 AM CDT          

  • Jul Corn    – 1/4
  • Jul Beans   -3
  • Jul Wheat   -1 1/2
  • Jun Cattle  +.22
  • Jun Hogs    -.25
  • Jun Dlr     -.06
  • Jun S&P     -2.00
  • Jul Crude   -.43
  • Jun Gold    -2.50

 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

Tight Stocks Keep Soybean Bulls Alive

May 29, 2014

Good Morning! Paul Georgy with early morning comments for May 29, 2014 at 4:50 am CDT.  

Grain futures are mixed. Soybeans are leading the strength on tight supplies of old crop and talk that China may be looking for immediate needs.

Wheat is higher on short covering and dry weather forecasts for Russia’s grain producing area. Corn continues to be pressured by US crop getting off to a good start.

The Roger Fund Roll should begin today and the Goldman Roll starts next week. Bear spreading will be a feature as they roll out of the nearby contracts.

The July soybean contract has had the propensity to rally ahead of the weekly export sales report. This week the report will be released on Friday morning due to the holiday.

There have been more reports of South American soybeans coming into the US. Traders are now suggesting the amount of beans which have arrived, in transit and still to be loaded could equal 60 million bushels or more. Add in the imports from Canada and total imports project to nearly 90 million bushels, the USDA’s forecast.

Canadian National Railway Co. said on Wednesday it is exceeding grain-shipment levels mandated earlier this year by the Canadian government despite a record crop that has squeezed available transportation and infrastructure.

The weekly EIA report will be released later this morning.

Cash cattle trade this week is expected to be steady to weaker as showlist numbers increase and packers call in contracts. However packer margins are in the black which could cause feedlots to hold out for higher prices. The high cost of feedlot replacements is another reason to put more weight on cattle before marketing. Beef values were higher with choice up 1.19 and select up 1.50. CME Feeder Index is 191.89.

The number of PEDv cases at the nation’s animal health diagnostic labs continued to decline as of the week ending May 10 with 189 positive cases reported that week.

Lean hog futures have been hit with technical and fund liquidation the last few sessions. There have been more reports from pork producers of PEDv coming back a second time. Many believe we have not seen the tight numbers from last winter’s spread of the virus. Pork cutout values improved on Wednesday by 2.36 with 455 loads traded.

Markets as of 4:50 AM CDT          

  • Jul Corn    – 3/4
  • Jul Beans   +9 1/2
  • Jul Wheat   +4 3/4
  • Jun Cattle  +.85
  • Jun Hogs    +.40
  • Jun Dlr     -.15
  • Jun S&P     +1.25
  • Jul Crude   +.14
  • Jun Gold    -6.20

 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

Will Farmers Plant More Corn or Soybeans?

May 28, 2014

Good Morning! Paul Georgy with early morning comments for May 28, 2014 at 4:40 am CDT.  

Grain futures are mixed as old crop soybeans are supported by tight supplies. Planting progress weighs on corn and wheat.

Listen to the May Allendale Ag Leaders Webinar which was recorded last night.

As the calendar gets closer to June 1 and planting progress is back to a normal pace traders are talking about how many acres did the American farmer plant this year? The June 30 report will be very important in determining potential ending stocks for 2014/15. Weather will have its moment as the growing season moves along. However the long range forecast is projecting a cooler summer and adequate moisture which are the ingredients for high yields. The battle lines are being drawn between production potential, money flow and geo-political tensions around the world.

Corn planting, at 88%, was right on the average guess. Emergence is at 60% compared with the five year average at 64%.

Soybean planting, at 57% complete, is above the average guess of 55%. Emergence is 25% complete vs. five year average of 27%.

Spring wheat planting jumped to 74%, far above the 65% estimate. Emergence is at 43% compared with the five year average at 57%.

RJO’s Sao Paulo team is estimating the total soybean lineup for March/April/May (shipped and waiting to be loaded) should be in the range of 750,000 mt. They feel June/July shipments could be 250,000 mt or more which are not showing in lineup yet. From Paraguay they are hearing around 10 cargoes of beans all together so far, some are saying that could be more.

Producers with a high level of crop revenue insurance coverage are seeing current price risks associated with lower prices is greater for soybeans than for corn. November soybeans are about $1.00 above the spring price and December corn futures are only $0.05 above the spring price. Call your Allendale representative today to discuss your options.

Brazil is expected to announce that they will increase the percentage of vegetable oil in biodiesel from the current 5% (B5) to 6% (B6) starting in July and then to 7% (B7) in November of this year.

Livestock traders want to see some proof the hog numbers are as tight as many analysts have projected. Futures have fallen off the recent highs testing technical support. Pork production is running above year ago level due to increased hog weights. Last week slaughter weights were 19 pounds above last year. Even with nearly a 5% reduction in numbers, the extra weight is making up the supply difference. Pork cutout values are down 2.17.

Nearby cattle futures are weaker as traders move out of the June contract. Futures remain at a discount to cash. Beef values were higher with choice up 1.14 and select up 1.75. Packer margins are in the black. Packers will be tough to deal with this week as they will likely pull as many contracted cattle as possible. Cattle producers are adding weight instead of paying the high price for feeder cattle. CME Feeder Index is 191.95.

Markets as of 4:40 AM CDT          

  • Jul Corn    -2 1/4
  • Jul Beans   +12 1/4
  • Jul Wheat   -4 3/4
  • Jun Cattle  +.15
  • Jun Hogs    -.85
  • Jun Dlr     +.05
  • Jun S&P     +2.50
  • Jul Crude   +.23
  • Jun Gold    +.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

Another Great Weekend For Planting Progress

May 27, 2014

Good Morning! Paul Georgy with early morning comments for May 27, 2014 at 4:30 am CDT.  

Grain futures are lower across the board. Easing tension in Ukraine and good planting weather over the weekend is weighing on prices.

Trade is looking for corn planting to be in the 84-87% area; the 5 year average is 88%. Soybeans are expected to be 55-57% while the average is 52%. North Dakota planting got rained out on Saturday but most of Minnesota has been open through the weekend allowing for corn planting.

Join us for our Ag Leaders Webinar tonight at 8PM Central Time. This month, we welcome biofuel analyst, Craig Iriwn to share his expertise on changes in the biofuels industry and how they could impact U.S. grains. Register here

The old crop soybean bulls are continuing to tout the price is not high enough to ration domestic and export demand. However the bears are suggesting the weaker meal basis as a sign of a top.

The July/November soybean futures spread is being watched closely as funds begin their roll out of the July over next few weeks.

The CFTC Commitment of Traders report showed managed money reduced net long positions by 47,472 contracts. They also reduced net long wheat by 20,871 contracts and soybeans by 10,844 contracts.

Ukraine elects a new president, Petro Poroshenko. His election gives Europe and the US hope for political stability in the region. There will be some tough economic restructuring to meet the voters mandate.

Beef values closed out the week mixed with choice up .19 and select down .26. Traders will be looking for early week demand as retailers restock shelves after the holiday. The short work week and packers chain slowdown will be chatter for lower cash prices. The other side of the argument is packer margins are in the black and fed supplies are tight. The CME Feeder Index is 189.35.

This year’s average market hog is now producing an extra 14 lbs. more meat than last year. That is carcass weight! Last week carcass weight contributed additional 4.9% more pork ex: slaughter was down 3.1% yet pork production was up 1.7%. Pork cutout values were up 1.28 on Friday.

Livestock futures are expected to start the week steady-lower.

Markets as of 4:30 AM CDT          

  • Jul Corn    -6 1/4
  • Jul Beans   -15 1/2
  • Jul Wheat   -9 3/4
  • Jun Cattle  Steady-Lower
  • Jun Hogs    Steady-Lower
  • Jun Dlr     -.11
  • Jun S&P     +8.00
  • Jul Crude   -.38
  • Jun Gold    -8.40

 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

Can We See A Sell-Off In Soybeans Before Weekend?

May 23, 2014

Good Morning! Paul Georgy with early morning comments for May 23, 2014 at 4:15 am CDT.  

Grain futures are higher on follow through buying led by soybean complex.

Listen to Ryan Martin's Midday Weather Update

Soybean futures are overbought based on technical indicators. The news is old news with a different spin. South American beans continue to work into the US, the Chinese are auctioning off beans and the index roll out of the July contracts is just starting, export sales of old crop continue to be surprising and processor demand is strong.

The exports sales report yesterday morning was fuel that drove the July soybeans and meal to new highs. Traders view open weather as a chance for more corn less beans to be planted. Firm cash markets in soybeans continue to be underlying support. Funds were net buyers of 5,000 soybean and 2,000 meal contracts yesterday.

There have been 130,000 tonnes of South American soybeans already unloaded in the US and another 375,000 tonnes headed to us according to Brazilian port lineup.

Corn continues to struggle as farmers are making excellent planting progress. Driving back to Northern IL from the St Louis area yesterday, we saw fieldwork being done all along I55 and I39. Farmer selling of cash corn has been at a standstill while fieldwork can be done. If El Nino arrives in June, as is being touted, the Midwest crops should be on cruise control until harvest.

Biofuel groups expect the Environmental Protection Agency to send the final proposed targets to the White House as early as today.

Financial markets brace for weekend Ukraine election and new home sales are expected to rebound but remain well below recent 5-1/2 year high.

Wednesday’s 406,000 hog slaughter and Thursday’s run of 375,000 head was quite a bit under expectations. Is this the beginning of really tight supplies or because packers have reduced hours? Cash hogs were lower this week and pork cutout values are down 1.14.

Cash cattle traded in Kansas and Texas at $144. That was down $1 from last week. This was made despite the rise in choice and select beef this week of 5.91 and 4.71, respectively. Beef values on Thursday were higher with choice up .63 and select up 1.07. The CME Feeder Index is 188.45.

Markets as of 4:15 AM CDT          

  • Jul Corn    +2 3/4
  • Jul Beans   +6
  • Jul Wheat   +3    
  • Jun Cattle  -,22
  • Jun Hogs    -.75
  • Jun Dlr     +.14
  • Jun S&P     +.75
  • Jul Crude   -2.90
  • Jun Gold    +6.70

 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

All Eyes On Weekly Soybean Sales Data

May 22, 2014

Good Morning! Paul Georgy with early morning comments for May 22, 2014 at 4:30 am CDT.  

Grain futures are higher led by the soybean complex. Tight supplies of old crop soybeans, positive crush margins, strong cash bids and exports are providing food for the bulls.

Weather conditions will allow for planting progress over the weekend. However the northern cornbelt is expected to see more moisture early next week. The new crop soybeans are getting support from the discount to the July contract, current tight supplies and the good planting weather will likely mean more corn acres.

Traders are chattering about farmers switching from corn to soybeans in MN and ND. Our customers are telling us they are preparing for a switch but would plant corn if the window to plant was opened.

A report from driving down I55 to southern IL last night suggests the corn and soybean crops are off to a great start. The corn looks like there was excellent germination.

Corn futures are testing support while soybeans are taking out resistance levels. The old crop corn/soybean spread tests record highs.

Ethanol margins remain positive and last week 925,000 barrel a day were produced. This was the third largest production week of the year. It looks like usage is on target to meet USDA’s 8.6% increase over last year.

Weekly Export Sales release at 7:30.

                             Trade estimates          Trade estimates
                                for 2013/14                   for 2014/15
Wheat                 50,000-250,000          150,000-300,000
Corn                  325,000-525,000           50,000-200,000
Soybeans        (-150,000)-100,000         500,000-700,000
Soymeal               25,000-150,000           50,000-200,000
Soyoil                            0-20,000                      0-10,000

Russian grain exports in the 2014-2015 marketing year are likely to increase to 27-28 million tonnes from 25.3 million tonnes in 2013-2014.

Russia gets a new market for its gas supply as China signs a deal that could provide as much as 12% of their usage by 2018.

Ukraine corn harvest estimates are suggesting a 1 to 2 million tonne drop from last year. The Ukraine wheat could equal or exceed last year as weather conditions are beneficial for crop.

The spread between US and Brazilian soybeans continues to widen. Listen for talk of beans being sold into US.

Monthly cold storage data will be released this afternoon at 2:00 pm.

The cash cattle trade is expected to be lower this week as packers have a short work week ahead. However margins are good and retail clearance is being watched closely. Beef values were higher with choice up .93 and select up 1.08. The CME Feeder Index is 187.93.

Lean hog futures have had a strong performance this week as traders anticipate tighter cash hog supplies beginning in June. The Memorial Day holiday should provide a demand test as weather is expected to be excellent for a cookout. Pork cutout value is down 1.79. Packer margins are is the black, estimated at plus $51.79.

Markets as of 4:30 AM CDT          

  • Jul Corn    +2 3/4
  • Jul Beans   +15
  • Jul Wheat   +3 1/2
  • Jun Cattle  +.12
  • Jun Hogs    -.20
  • Jun Dlr     +.10
  • Jun S&P     +2.00
  • Jul Crude   -.18
  • Jun Gold    +6.70

 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

Look to Charts for Guidance

May 21, 2014

Good Morning! Paul Georgy with early morning comments for May 21, 2014 at 4:30 am CDT.  

Grain futures are mostly higher on short covering after Tuesday’s weakness. Without new fundamental news rallies will likely be seen as a selling opportunities.

Technical traders are watching the nearby July soybean futures closely as it retests the 15.00 level and falls back into the recent trading range. Fund selling and profit taking seemed to be the driver yesterday. Chart support crosses at the May lows of 14.41 ¼. Farmers were expected to accelerate spring planting under mild and mostly dry weather across the Midwest farm belt this week.

Soybeans in Brazil are back to a $50 per metric tonne discount to the US. Chinese crush margins have improved to near first quarter profitable returns.

Corn futures remain weak due to planting progress and ideal weather forecast for much of the Midwest.

Wheat futures are struggling between the late spring wheat planting and the deteriorating winter wheat crop. The Ukraine situation is quiet ahead of the presidential election on May 25.

Corn and soybean basis bids were steady to firm at processors and elevators around the Midwest. Farmer selling was light early yesterday but bin doors were closed after the late sell-off at CBOT.

ConAgra Foods Inc., Cargill Inc. and CHS Inc. won U.S. antitrust approval on Tuesday to merge their North American flour mill operations after agreeing to sell four mills to a Japanese company.

China is getting ready to auction corn out of government reserves on Thursday.

Russia offered wheat $50 per tonne cheaper than the US in a tender by Iraq.

China and Russia failed to sign a $400 billion gas supply agreement on Tuesday, despite growing urgency for the Kremlin to seal a deal as it faces economic and political isolation in the West over the crisis in Ukraine

The lack of support from the feeder cattle trade as well as larger than expected showlists are providing resistance to an up trending cattle market.

Feedlots are looking at a breakeven of just over $131 on outgoing cattle according to USDA’s feedlot model. Last week’s cash cattle traded at $144.

Beef values were sharply higher with choice up 3.01 and select up 1.49. The CME Feeder Index is 187.88. Cash cattle trade is at a standstill early this week.

Hog slaughter this week will run just over 2.0 million head which brings it 1% to 2% under last year. However dressed weights are running 11 lbs. over last year which will put pork production above last year. Pork cutout values are up 2.04.

Markets as of 4:30 AM CDT         

  • Jul Corn    +1 1/2
  • Jul Beans   +5 1/2
  • Jul Wheat   +4    
  • Jun Cattle  +.02
  • Jun Hogs    +.90
  • Jun Dlr     -.09
  • Jun S&P     +5.50
  • Jul Crude   +.80
  • Jun Gold    -1.90

 

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

How High is Too High For Feeder Cattle?

May 20, 2014

Good Morning! Paul Georgy with early morning comments for May 20, 2014 at 4:30 am CDT.  

Grain futures are bargain hunting in wheat and corn. Soybeans are supported by tight old crop supplies.

Listent to Allendale's Midday Weather Audio Update

The USDA put the corn planted progress at 73%, compared to the 5 year average of 76%. The trade was looking for corn planting progress to be in 70 to 75% area. North Dakota only has 17% of corn planted compared to 54% average.

Soybean plantings came in at 33% done compared to the 33 to 36% trade was expecting.

Winter wheat conditions dropped another percent to 29% Good/Excellent. While the poor to very poor category increased by 2% to 44%.

Spring wheat is 49% planted versus 68% average. Most of these unplanted acres are in North Dakota.

Planting has resumed in many areas which has end-users raising basis bids to attract movement of corn. Soybean basis is holding steady.

NOAA’s forecast for the upcoming growing season weather in the Midwest is just what the "corn doctor ordered". In Allendale’s preliminary study it suggests a high probability to beat trend yield assuming the current weather outlook. If you factor in an increase in planted acreage, ending stocks will rise sharply in 2014/15 marketing year. Historically that is not friendly to price.

China sold over 80% of the 300,000 tonnes of soybeans offered at this week’s government auction.

Total global commodity assets under management fell to $322 billion in April 2014 from $324 billion in March 2014, Barclays Capital said on Monday.

The chief of the North Atlantic Treaty Organization said Monday that he hadn’t observed a reduction in the Russian troops massed near Ukraine, despite the announcement of a withdrawal by Russian President Vladimir Putin.

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

The high price of feeder cattle replacements have feedlots holding onto cattle a little longer. The supply shift from yearlings to calves is providing a good reason to add more weight. Cash feeder prices are being driven by extremely tight supplies, better grass conditions and current profitable closeouts. Can August Feeder Cattle futures reach $200.00? Why not? Beef values were higher with choice up1.24 and select up .83. The CME Feeder Index is 187.13.

Margins are positive and packers have reduced work hours so that they have enough hogs for this week. Traders will be watching how retailers market the high priced pork for the Memorial Day Holiday. Pork cutout values are up .48 at 114.67.

Markets as of 4:30 AM CDT          

  • Jul Corn    +2 3/4
  • Jul Beans   +9 1/4
  • Jul Wheat   +10 1/4
  • Jun Cattle  -.10
  • Jun Hogs    +.12
  • Jun Dlr     +.05
  • Jun S&P     -1.25
  • Jun Crude   -.01
  • Jun Gold    -2.00

 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

Traders Looking For New News

May 19, 2014

Good Morning! Paul Georgy with early morning comments for May 19, 2014 at 4:30 am CDT.  

Grain futures are mostly lower with wheat leading the sell-off.

Trade is looking for corn planting progress this afternoon in 70 to75% complete area vs. 59% last week and 79% average.  Soybean planting expected to be 33 to 36% done vs. 20% last week and 38% average. 

The USDA will give us the first national corn ratings for 2014 today, last year we started with 63% good/excellent.

The CFTC Commitment of Traders report showed managed money reducing their long positions in corn by 11,435 and in soybeans by 6,281. They made little change to their net long position in wheat.

All grain contracts at CBOT had a sharp sell-off last week which left the corn and wheat contracts testing major support levels. Technical support crosses at 4.80 or just under in the July corn contract and 6.70 in the July wheat contract. Watch these levels early this week, a close below these prices could push prices lower again.

Weather remains important to traders as planting progresses and plant development starts. However make sure you read Ryan Martin’s morning weather update.

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

Cattle-on-Feed report was neutral as USDA data came in very close to trade average estimates. Placements during April ran 4.9% under last year. The number of finished cattle leaving feedlots in April, Marketings, was 2.0% under last year. Marketed during April was a 2.4% decline from a year ago. The actual number of cattle that were leaving feedlots last month was the smallest April in this data series (which goes back to 1996). Beef values were higher with choice up .77 and select up 1.24. The CME Feeder Index is 184.25.

Hog slaughter last week was 1.999 million head and 1.9% under last year. Over the past four weeks the kill has run 4.0% under last year. Trade is waiting to see the 10% decline in market ready hog supply which analysts are expecting from PEDv. Pork cutout values are up .96 at 114.19.

Markets as of 4:30 AM CDT          

  • Jul Corn    -4 1/4
  • Jul Beans   + 1/2
  • Jul Wheat   -7
  • Jun Cattle  Steady
  • Jun Hogs    Steady
  • Jun Dlr     -.07
  • Jun S&P     -7.50
  • Jun Crude   +.63
  • Jun Gold    +7.40

 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 Chart Picture Predict Price Direction Today?

May 16, 2014

Good Morning! Paul Georgy with early morning comments for May 16, 2014 at 4:00 am CDT.  

Grain futures are mostly higher on bargain hunting against technical support levels.

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

I apologize for the limited comments this morning but I had a short night in New York City after the NFA Board Meeting and am catching an early flight back to Chicago.

Once the NOPA crush report was larger than trade estimates and once the numbers were released the soybean complex began the sell-off. The export sales numbers were uninspiring as most of old crop sales were switches from unknown to a reported buyer.

Weather conditions continue to weigh on futures in corn even with the little planting progress this week. More than 60% 0f the corn is in the ground and looking great. Soybeans have plenty of time to be planted and more open weather is on the horizon.

Read Allendale’s Meteorologist Ryan Martin’s weather comments to get a more specific forecast.

(Reuters) – Nearly three dozen advanced biofuel companies, including DuPont and Spain’s Abengoa, appealed to President Barack Obama on Thursday to rethink the methodology for setting U.S. biofuel blending quotas.

The drop in futures prices on Thursday had farmers stop selling and some processors raised basis bids.

Corn and wheat are headed for the biggest weekly losses in almost a year. One level of technical support was broken yesterday. Today 4.80 in the July and 4.78 in the Dec will be key areas to watch. A weekly close below these levels could trigger more selling pressure. The corn traders are looking for support at the critical 100 day moving average.

Soybean futures are in a sideways trading range for the month of May. A close above 12.30 or below 12.10 will be important for the direction of the next price move.

Lean hog traders want to believe prices should go up sharply but seem to be running out of patience and exiting long positions. Pork cutout values are up .31.

Cash cattle have been lightly traded so far this week at 144 to 146 which would be steady to lower compared to last week. Beef cutout values were higher on Thursday with choice up .13 and select up .01. The CME Feeder Index is 184.08. Futures remain choppy as money flow and fundamentals battle on price direction.

Markets as of 4:00 AM CDT          

  • Jul Corn    +1 1/4
  • Jul Beans   +2
  • Jul Wheat   +1 1/4
  • Jun Cattle  +.17
  • Jun Hogs    -.32
  • Jun Dlr     -.01
  • Jun S&P     +.750
  • Jun Crude   -.02
  • Jun Gold    -.10

 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 Domestic Meal Demand Drive Soybean Prices Again?

May 15, 2014

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

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

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

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

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

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

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

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

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

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

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

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

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

Markets as of 4:15 AM        

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

 Chart of the Day

daily chart

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Better Weather Pressures Wheat

May 14, 2014

Good Morning! Paul Georgy with early morning comments for May 14, 2014 at 4:30 am.  

Grain futures are mixed with corn and soybeans higher, wheat lower.

China sold 276,000 tonnes out of the 300,000 they were offering in this week’s auction.

Wheat values are under pressure from several forces. The USDA sees large world supplies which compete with US during the next marketing year. Although wheat conditions deteriorated it becomes a battle of two crops the soft winter wheat and the hard winter wheat.

The soft wheat variety is grown mostly in the eastern cornbelt and has been getting timely rains. Some of the hard wheat area (western cornbelt and plains) has been in a hit and miss pattern with much of the western area a miss. There also is a strong seasonal pattern that is weighing on wheat as harvest is only a few weeks away.

Rosario Grain Exchange in Argentina sees corn crop at 23.9 mmt and soybean crop at 55.7 mmt which is an increase for both from last estimate.

NOPA crush data will be released tomorrow at 11:00 am. This data could have an impact on the old crop/new crop soybean spreads. Processors have been willing to pay up for soybeans.

More discussion by trade believing El Nino will have a presence this summer. That would mean a normal summer and a potential higher than trend yield for corn. This may keep managed money from building a larger long position.

May contracts at the CBOT will expire at noon today.

The US Dollar Index has had a huge turnaround on the charts since last Thursday. It tested long term support at the 79.00 level then rallied to check out the downtrend resistance line. Remember a weaker dollar creates an incentive for exports, especially meats and grains.

The USDA will release the May 1st Cattle-on-Feed Report on Friday at 2:00 pm CDT. Trade estimates are for On-Feed to be down 1%, Placed down 3.6% and Marketings down 2.1% from a year ago. Placements are expected to be less than a year ago due to high price of feeders and the incentive to keep cattle longer to put on more weight. Beef cutout values are higher with choice up 2.79 and select up 2.89. CME Feeder Index is 184.06.

Lean hog futures have been very choppy. Cash hog packers have been cutting back hours to prepare for the tighter hogs supplies due to PEDv. This could cause extremely volatile cash markets during a time of increased demand from holiday and cookout featuring at the retail counter. Pork cutout values are down 2.20.

Markets as of 4:30 AM        

  • Jul Corn    +1 1/4
  • Jul Beans   +1 1/2
  • Jul Wheat   -3 3/4
  • Jun Cattle  -.12
  • Jun Hogs    +.20
  • Jun Dlr     -.09
  • Jun S&P     -1.00
  • Jun Crude   +.22
  • Jun Gold    +5.90

 Chart of the Day

daily chart

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Larger Planters Mean More Planting Progress

May 13, 2014

Good Morning! Paul Georgy with early morning comments for May 13, 2014 at 4:30 am.  

Grain futures are mostly higher on short covering and bargain hunting.

Corn planting progress increased last week at a record pace of 30% to put total corn planted at 59%. This number exceeded the trade average guess of 56% complete.

Soybean progress jumped to 20% which is now above the 5 year average pace of 18%. Rain throughout the Midwest this week could slow planting pace but the "hit and miss" shower patterns will allow for some progress.

The trade had the weekend to analyze the USDA’s report last Friday. The aggressive corn export projection of 1.9 billion bushels, an increase of 150 million bushels, seems unlikely. Allendale is going to keep our forecast for exports at 1.85 billion bushel.

A study done by Allendale’s research department took a look at years with planting delays and what happens to price when 50% of corn planting is complete. After the top is in, the average selloff is 24% from the high. Call your Allendale broker for more details.

Adjustments in the soybean exports are in agreement with our research. They raised total soybean exports to 1.6 billion bushels. Currently we have 1.64 billion bushels sold and normal switching from old to new crop beans is about 45 million bushel.

The NOPA crush data will be important as domestic demand for meal has been very strong. This data will be released on Thursday at 11:00 am.

Last trading day for the May contracts at the CBOT is tomorrow May 14th.

Ryan Martin’s weather forecast has been updated already, click here to read.

Winter wheat conditions dropped 1% to 30% good to excellent vs. 32% last year while poor to very poor climbs 4% to 42% vs. 39% last year.

Russia, unsurprisingly, supported the referendum outcome in Ukraine, but did not make any bold moves. The Kremlin released a brief statement saying that it hopes the desires of the voters in the Donetsk and Luhansk region will be carried out in a "civilized way."

This week’s feedlot showlist estimate shows a 14,000 head increase. More numbers were found in Nebraska, Texas, and Colorado while fewer were offered in Kansas. Trend should continue to show increases as we work our way into June. Beef cutout values were higher on Monday with choice up .56 and select up .43. The CME Feeder Index is 183.78.

Currently, pork production is 1% below a year ago at this time. The USDA is estimating a 1.8% decline for the year. Hog slaughter numbers are down over 4% for the year but heavier weights are making up for smaller numbers. Private analysts are still expecting a decline of 10% or greater during June, July and August. Pork cutout values are up 2.09.

Markets as of 4:30 AM        

  • Jul Corn    +2 1/2
  • Jul Beans   +10
  • Jul Wheat   -1
  • Jun Cattle  -.02
  • Jun Hogs    -.15
  • Jun Dlr     +.02
  • Jun S&P     +2.00
  • Jun Crude   +.14
  • Jun Gold    -2.80

 Chart of the Day

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Sight Set On Planting Progress

May 12, 2014

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

Grain futures are mostly lower on expected planting progress and follow through reaction from USDA report.

Moisture and planting progress make for ideal conditions in some areas of the Midwest.

Planting progress is expected to have had great strides last week and some think we could be near the 5 year average for corn on May 11 of 58%. On the May 4th update it was 29%. In the past five years we have added anywhere from 6% to 20% with an average gain of 14%. The ultimate record planting in this particular week was a 34% gain in 1987. Traders are guessing soybean planting could be 15 to 35% completed.

The Buenos Aries Commodity Exchange is estimating corn harvest a 29% complete and soybean harvest at 64% done. Traders are watching labor issues in Argentina’s main port of Rosario.

Last trading day is Wednesday for the May contracts in the grain complex. NOPA will release their soybean crush data for April on Thursday at 11:00 am.

The vote in Ukraine over the weekend is not sanctioned by the EU and they will not accept the outcome. Reports of multiple voting issues such as votes being placed several times by the same person and no voting booths to cast the votes are just a few of the problems. The real question is, "What will Putin do with the voting results?"

USDA revised their 2014 pork production estimate by a moderate 109 million pounds which moved their 2014 estimate from a 1.8% decline vs. 2013 to now a 2.3% decline. They still have some sharp differences in supply projections compared to the private trade. Pork cutout values are down .35.

USDA did not change much on their 2014 beef balance sheet. Production was lowered by 14 million pounds from the previous month’s guess. That took this year’s production from a 4.4% drop to now a 4.6% decline. With a moderate change in exports the amount of beef offered to the US consumer will run 4.3% lower than 2013. They also gave us their first estimates for 2015 which showed a decline of 1.0% year over year. Beef cutout values were weak with choice down 2.39 and select down .30. The CME Feeder Index is 182.72. The early call would be steady-lower.

Markets as of 4:30 AM        

  • Jul Corn    -4
  • Jul Beans   +1
  • Jul Wheat   -14
  • Jun Cattle  Steady-Lower
  • Jun Hogs    Steady-Lower
  • Jun Dlr     -10
  • Jun S&P     +3.00
  • Jun Crude   +.24
  • Jun Gold    +5.00

 Chart of the Day

daily chart

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USDA Gives First Look At 2014 Production

May 09, 2014

Good Morning! Paul Georgy with early morning comments for May 9, 2014 at 4:30 am.  

Grain futures are mostly lower as trade waits for the USDA Report at 11AM.

Soybean futures remain strong on firm processor basis, no new cancellation news and CONAB’s smaller than expected soybean production estimates. Soybeans are supported by trader’s anticipation of USDA lowering the 2013/14 ending stocks.

The corn market has stayed strong going into the report on spread unwinding and trade estimates of increased exports.

Wheat is watching the geo-political tension in Ukraine, the forecast for rain in the southern plains, or lack of, and thoughts that hard red winter wheat production could be down sharply on today’s report.

A few keys to today’s report:

How will USDA handle the old crop balance sheet ending stocks for soybeans?

Will the reduction in HRW wheat production be offset by increases in SRW and White wheat production?

Will USDA stick with their February Forum trend yield of 163.5 for corn and 45.2 for soybeans when we get the first look at the 2014/15 balance sheet?

How will they adjust 2014/15 corn and soybean imports by China?

Markets will likely react very quickly to today’s report and the adjustments made by USDA. Then the trade will be looking ahead to Monday’s planting progress data. Our customers are making huge strides to get corn and soybeans planted this week.

Rich Nelson, Allendale’s chief Strategist has looked at years with delayed planting and seasonal rallies in corn and found that most years the rally is complete by early June.

Go here for estimates ahead of today’s report

Cash cattle trade has been quiet this week with only a few trading at steady money early. Futures traders are wrestling with the discount of futures to cash and the potential for an increase in fed cattle supplies over the next month. Some of the potential increase in supply may already be moving to market as select beef is near April lows. Retailers seem to have their needs booked for Memorial Day. Beef values were lower with choice down 1.50 and select down .75. The CME feeder Index is 181.82.

Hog traders are waiting for proof that hog supplies are really not there. This week cash hogs found support as producers have focused on fieldwork. Widespread rain could bring hogs to market. Pork cutout values are .11 higher on Thursday. 

Markets as of 4:30 AM        

  • Jul Corn    -1 1/2
  • Jul Beans   + 1/4
  • Jul Wheat   -4 3/4
  • Jun Cattle  -.17
  • Jun Hogs    +.50
  • Jun Dlr     +.18
  • Jun S&P     -3.00
  • Jun Crude   +.81
  • Jun Gold    +1.90

 Chart of the Day

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A Few Reports To Watch Today

May 08, 2014

Good Morning! Paul Georgy with early morning comments for May 8, 2014 at 4:30 am.  

Listen to today's Midday Weather Audio Report

Grain futures are quiet with some back and fill action. Traders will have some new news to trade today.

At 7:30 this morning the USDA will release weekly export sales data. Trade estimates are:

                                        Old                                             New
Corn                      500,000-800,000             100,000-300,000
Soybeans             -100,000-100,000             100,000-300,000
Soymeal                  50,000-150,000                        0-200,000
Soyoil                               0-20,000                          0-10,000
Wheat                    100,000-300,000             200,000-300,000

CONAB (Brazil’s crop supply agency) will release its monthly estimate for soybean production. Traders will be watching this number for indications whether farmers planted corn or soybeans as the second crop this year.

Expect traders to do some last minute adjusting of positions ahead of Friday’s USDA report which is due to be released at 11:00 am.

US Ethanol production slipped a little in the latest week. It is still a strong pace overall. We would expect to see production stabilize over the next six weeks before the end of the marketing year decline hits. Current marketing year production is 10.4% above last year. The USDA’s target is a 7.6% increase year over year.

Brazil’s largest ethanol production company is shutting 10 of its plants due to the government policy on gasoline pricing and profitability. There already have been 6 ethanol companies in Brazil file for bankruptcy since the beginning of the year.

Lebanon buys 30,000 tonnes of wheat from Ukraine. Putin’s troops still remain on the Russian boarder while many observers believe he is waiting for the results of the Ukraine election later this month.

China intends to auction 300,000 tonnes of soybeans out of government reserve.

There were another 143 contracts of soybeans delivered against May futures contracts through April 22.

China will buy more pork for the government reserves in an effort to support the hog industry. This in turn would ultimately improve corn and soybean meal prices there.

Livestock futures remain the battle between tight supplies of market ready supplies and weaker product prices. A few cattle have traded at 145 in the south and 150 in the north. Retailers appear to have their needs bought for the Memorial Day holiday and will now wait to do some fill in buying about a week before that weekend. Beef values are weaker with choice down .73 and select down .30.  The CME Feeder Index is 181.10

Technically speaking the June cattle contract had an outside day down on Wednesday, not a positive signal.

Lean hog futures are being weighed down by the premium of summer contracts to cash prices and funs rolling out of June into the July. Pork cutout values are down .32.

Markets as of 4:30 AM        

  • Jul Corn    -1
  • Jul Beans   +4 3/4
  • Jul Wheat   -6 3/4
  • Jun Cattle  +.05
  • Jun Hogs    -.52
  • Jun Dlr     -.12
  • Jun S&P     +.25
  • Jun Crude   -.36
  • Jun Gold    +2.00

 Chart of the Day

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Is Money Flow Affecting Prices?

May 07, 2014

Good Morning! Paul Georgy with early morning comments for May 7, 2014 at 4:30 am.  

Grain futures are mixed in a very quiet overnight session.

Listen to Ryan Martin's Midday Weather Audio Report

Corn and wheat values remain strong going into the USDA report on Friday. The key driver is money flow moving into commodities as a hedge against the effects of a full blow conflict in the Black Sea Region. Corn and wheat are getting the benefit as Ukraine and Russia are major exporters of these products.

Wheat is also finding support due to southern plains weather and a technical breakout to the upside in the July contract.

Corn traders are looking for a decrease in ending stocks on Friday’s report and planting delays especially in the northern cornbelt. These factors are adding value to the direction of corn futures.

Soybeans are fighting the selling pressure due to bull spread liquidation. More talk of cancellations has some of the longs coming out of the market. There were 176 contracts delivered against the May futures this morning with no strong stoppers.

A U.S. appeals court on Tuesday threw out an oil industry challenge to the Obama administration’s 2013 biofuel mandate, ruling that the government has "wide latitude" to decide whether to modify renewable fuel use targets, and by how much.

Trade estimates for US Wheat Production as surveyed by Reuters:

                                              All         Hard       Soft        White       All
                                                             Red        Red         
                                            Winter    Winter    Winter    Winter    Wheat
Average trade estimate       1.468       0.782      0.467      0.219       2.046
Highest trade estimate        1.591       0.870      0.569      0.268       2.182
Lowest trade estimate         1.312       0.610      0.409      0.188       1.891
USDA June estimate          1.509        0.781      0.509      0.219       2.080
U.S. 2013 winter wheat      1.534        0.744      0.565      0.225       2.130

China’s government will hold a second round of pork buying in order to stabilize hog prices.

We had a second day of higher cash hog trade on Tuesday. Pork demand has been a concern with high prices and starting to see a push back. Pork cutout values were down 3.73.

Cattle futures are consolidating as traders worry about dressed beef prices working lower for a few weeks. Supplies of market ready cattle should be increasing as suggested by recent Cattle on Feed reports. Beef cutout values are lower with choice down 1.02 and select down 1.89. The CME feeder index is 181.10.

Markets as of 4:30 AM        

  • Jul Corn    + 1/4
  • Jul Beans   -3 3/4
  • Jul Wheat   -4
  • Jun Cattle  -.30
  • Jun Hogs    -.52
  • Jun Dlr     +.07
  • Jun S&P     +.00
  • Jun Crude   +.84
  • Jun Gold    +2.70

 Chart of the Day

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Is Corn Export Demand Ahead of Pace?

May 06, 2014

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

Grain futures are lower on profit taking after Monday’s rally.

Click here to listen to Meteorologist Ryan Martin's Midday Audio Report

Traders are drawing their proverbial lines in the sand as we approach the May USDA Supply and Demand report on Friday. The demand bulls could have it their way as current corn and soybean sales are near the USDA’s total sales for the year. Corn sales for the next 4 months would have to be about 77% below the 5 year average for the balance of the marketing year. Rich Nelson, Allendale’s Chief Strategist believes it is likely that USDA will not make adjustments to the ethanol and feed use on this report.

Trade estimates as compiled by Reuters:

                                       U.S. 2013/14 ending stocks     U.S. 2014/15 ending stocks
                                       Wheat      Corn   Soybeans       Wheat    Corn   Soybeans
Average trade estimate   0.588       1.314      0.134         0.559     1.672      0.307
Highest trade estimate    0.633       1.435      0.174         0.747     2.354      0.464
Lowest trade estimate     0.570       1.231      0.125         0.425     1.295      0.200
USDA April estimate     0.583       1.331      0.135           n/a           n/a         n/a

USDA put corn planting progress at 29% complete which was slightly below trade average estimates. Tractors and planters are moving across the fields and some major progress should be seen this week.

Winter wheat conditions slide 2% in the good/excellent category and the poor/very poor acres increased 4%. Planting progress for spring wheat is 26% complete compared to 41% average.

Allendale’s Meteorologist, Ryan Martin has added a new product called Midday Audio Weather Update which you can listen to it by clicking Weather Update. The update is well worth your time as weather is very important to market direction.

Ukraine says it is now at war with pro-Russian insurgents after the outbreak of violence in the western port city of Odessa.

It was good to see both cash hogs and cash pork post $1 to $2 gains. Could this be the beginning of seasonal tightening or a surge in retail demand before the Memorial Day Holiday? On a seasonal basis hog numbers are going to continue to decline as the effects of PEDv over the last year will tighten supplies. Industry analysts are still looking for a 10% reduction is hog supplies this summer. The real question is how much of the decline in numbers will be made up by increased hog weights. Pork cutout values are up 2.05.

Live cattle numbers are on the increase as summer approaches. Product could see a sharp decline after the holiday buying is complete. Beef cutout values were mixed with choice up .52 and select down 2.02. The CME Feeder Index is 180.83.

Markets as of 4:30 AM        

  • Jul Corn    -2 3/4
  • Jul Beans   -13
  • Jul Wheat   -1
  • Jun Cattle  +.47
  • Jun Hogs    +.80
  • Jun Dlr     -.26
  • Jun S&P     +3.00
  • Jun Crude   +.26
  • Jun Gold    +.40

 Chart of the Day

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Wheat Breaks Chart Resistance

May 05, 2014

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

Grain futures are mixed as wheat breaks into new highs for the move.

Weather, chart signals, Ukraine and government reports are all influencing trader’s bias to start the week.

The forecast is much like it was on Friday which should allow for farmers to put the tractors and planters into action across much of the Midwest. Rain in the hard red wheat areas was light over the weekend and no drought busting moisture is in the forecast. How long can wheat hold on waiting for some moisture?

The sharply higher opening last night took out major resistance in the July contract at 7.25. Old resistance now becomes support.

The Ukraine army is trying to defend local communities against the pro-Russian protestors. Things heated up this past weekend in the east and southeastern portions of Ukraine as both sides had reported casualties. Putin has not moved his troops into Ukraine as far as we know.

The USDA will report planting progress this afternoon at 3:00 pm. Range of estimates are wide with a 25 to 35% corn planted. Most estimates are in that 26 to 30% area. The 5 year average is 42%.

The CFTC Commitment of Traders report showed that the week ending April 29 managed money funds added 27,756 corn contracts to their already long position. They were net buyers in soybeans of 3,725 and net buyers in wheat of 15,000 contracts.

The USDA will be releasing their May Supply and Demand estimates on Friday May 9 at 11:00 AM. The report is expected to provide something for the bulls and the bears. We will give more details as we get closer.

Live cattle traded higher on Friday with the South up 1.00 and the North plus 3.00 on dressed basis. However the cutout values were lower with choice down 1.96 and select down 3.51. The CME Feeder Index is 179.56. Pork cutout was up .19. The weak close in futures on Friday would suggest a lower start when markets open this morning.

Markets as of 4:30 AM        

  • Jul Corn    + 3/4
  • Jul Beans   – 1/4
  • Jul Wheat   +12
  • Jun Cattle  Steady-Lower
  • Jun Hogs    Steady-Lower
  • Jun Dlr     -.02
  • Jun S&P     -7.75
  • Jun Crude   +.59
  • Jun Gold    +10.10

 Chart of the Day

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Stage Is Set For Wild Week Ahead

May 02, 2014

Good Morning! Paul Georgy with early morning comments for May 2, 2014 at 4:40 am.  

Grain futures are mostly higher as markets try to take back some of yesterday’s losses.

Technical traders will be watching the 14.60 area as support. A close below that level could trigger more selling.

The weather forecast has given producers a bigger window to plant at least south of I80. Planting progress estimates from the USDA on Monday afternoon will be watched very closely as we start the week.

Traders are already concerned about the yield numbers USDA will use on the May 9th Supply and Demand Report. Rich Nelson has done a study on what the USDA may do to corn yields based on late plantings. Details will be available next week.

Traders around the world will be back to work today. Yesterday was May Day in countries such as China and Argentina. We are still waiting for news or confirmation of China cancelling shipments of soybeans. The Weekly USDA Sales Report on Thursday showed the first net cancellations for soybeans.

Crop tour puts Kansas wheat yield forecast at 33.2 bushels per acre vs 5 year tour average of 41.8, actual last year was 38.0 bushels per acre. Total production for Kansas is seen as 260.7 million bushel.

Outside markets are waiting for the Unemployment numbers at 7:30 and the Factory Orders data which will be released at 9:00.

Competition at the retail counter has hog traders concerned about how much pork demand is affected by high prices. Fund buying and selling (money flow) has had an impact on futures prices this week. We expect volatility to continue for some time as the trade deals with PEDv effect on hog supplies. Pork cutout values were down 2.02 on Thursday.

Feeder cattle futures jumped as warmer weather and recent rains ignited demand at auctions. Cattle buyers are looking for light weight animals to put on pasture. Cheaper corn prices improve profit potential and is the reason for buying enthusiasm of feeder cattle. Beef cutout values are weak with choice down 2.76 and select down 1.31. The CME feeder Index is 179.03. Can cattle close strong for the week?

Markets as of 4:40 AM       

  • Jul Corn    +2
  • Jul Beans   +1
  • Jul Wheat   +6 1/2
  • Jun Cattle  +.05
  • Jun Hogs    -.35
  • Jun Dlr     +.04
  • Jun S&P     +1.50
  • Jun Crude   +.47
  • Jun Gold    +1.40

 Chart of the Day

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How Much Corn Will Be Planted This week?

May 01, 2014

Good Morning! Paul Georgy with early morning comments for May 1, 2014 at 4:30 am.  

Grain futures are on profit taking and a little warmer weather forecast.

Producers in Indiana have been planting and will make excellent progress through the weekend. Other parts of the cornbelt are too wet and planting will be delayed a few more days.

When you have a chance, listen to Ryan Martin’s (Allendale Meteorologist) comments from Tuesday’s Ag Leaders Webinar. He shares his insight on planting and summer weather. Click here. You can read Ryan’s Daily Comment by going to http://www.allendale-inc.com/radio/weather/

We are starting to get confirmations of Brazilian beans being shipped to the US. There have been two cargoes of beans imported into NOLA, three are en route to Mobile, AL, Norfolk, VA and Wilmington, NC and another three cargoes showed up in the Brazilian line up making a total of 6 cargoes waiting to load beans for the US. Trade is now estimating 85 million bushel of soybeans could be imported in US.

The USDA will release this week’s export sales report at 7:30. The following are estimates surveyed by Reuters.

                          Trade Estimates                  Trade estimates
                               2013/14                                 2014/15
Wheat               150,000-350,000                250,000-450,000
Corn                  450,000-675,000                200,000-500,000
Soybeans          -250,000- +100,000            250,000-450,000
Soymeal               50,000-190,000                          0-75,000
Soyoil                            0-50,000                            0-10,000

IMF approved a $17 billion aid program for Ukraine. The IMF will release $3.2 billion to Kiev immediately.

The EIA ethanol report showed production down from a week ago but still 5% higher than a year ago. So far this year, ethanol production is 10% larger than last year when USDA’s target is for a 7% increase.

National Pork Producers Council says the impact of PEDv could push US hog prices up 15 to 25% and consumer-level pork prices up by 10-12%. The NPPC sees US pork production down 6-8% in third quarter; higher hog weights will offset 7 million piglet deaths.

The Lean Hog futures have been extremely choppy this week as funds have been sellers. This week’s lows should be initial support to maintain uptrend on charts. Pork cutout values are up .73.

Beef seems to be getting more ink in the grocery store features this week. The retailers are expected to have purchased their need for Memorial Day by the 10th of May. Look for product to be well supported through that time. Beef product values are mixed with choice down 1.26 and select up 1.87. CME Feeder Index is 179.62.

Markets as of 4:30 AM

  • Jul Corn    -3 3/4
  • Jul Beans   -7 1/4
  • Jul Wheat   -2 1/2
  • Jun Cattle  -.02
  • Jun Hogs    -.02
  • Jun Dlr     -.03
  • Jun S&P     +1.00
  • Jun Crude   -12.50
  • Jun Gold    -3.80

 Chart of the Day

daily chart

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