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The Allendale Wake-Up Call

RSS By: Paul Georgy,

Paul Georgy serves as president/CEO of Allendale, Inc., a worldwide agricultural advisory and research firm that provides agricultural commodity price research and risk management alternatives for producers, major food companies, international corporations, foreign governments, and major news vendors.

Profit Taking Provides Today’s Weakness

May 29, 2013

Good Morning! Paul Georgy with early morning comments for May 29, 2013 at 4:55 am.  Corn and soybeans are lower as traders take some profits after yesterday’s sharp rally. Weather forecasts will dominate traders’ psyche until planted acres are determined. Any dryer forecast could weigh on a technically overbought market. The USDA reported that corn planting was 86% complete as of Sunday. That was right on the traders estimate and only 4% below the 5 year average of 90%. There are about 13. 6 million acres of corn left to plant. Many in the trade are talking about farmers taking prevent planting; however, when we do the numbers it may not be all that lucrative unless producers have taken the top tier of insurance coverage. It is likely producers will plant corn until the second week of June. The balance sheet for corn doesn’t change much even with a 2 to 3 million acre reduction in planted acres. Remember, harvested acres and yield carries the most weight this year when compared to 2012. Soybean planting was registered at 44%, which is a little higher than traders were expecting but equates to about 43.2 million acres left to be planted. Soybean yields are more of a concern. As the saying goes, "soybeans don’t like wet feet." Spring wheat planting increased 12% last week to 79% versus 86% average. Wheat conditions continue to improve around the world thus giving reason for the fund selling pressure. Yesterday they were net sellers of wheat while buying a net 12 to 13,000 contracts of corn and soybeans. During the next several trading sessions, we will have major funds rolling positions out of the July contract in to Sept and Dec in corn and August and Nov in the soybeans. Boxed beef was lower on Tuesday with choice down .33 and select down .51. The feeder index was up .43 to 132.10. The pork industry continues to tract down the cause of the swine-only virus, the Porcine Epidemic Diarrhea Virus (PEDV), which poses no danger to humans or other animals. Money flow into the stock market and strength in grains continue to limit buyer enthusiasm in livestock futures. Pork cutout value was down .55 yesterday. If you were unable to listen to the Allendale Ag Leaders Webinar last night, a link to the recording will be available later this morning.

Markets as of 4:55 AM

  • Jul Corn    -2 1/2
  • Jul Beans   +1
  • Jul Wheat   -4
  • Jun Cattle  +.22
  • Jun Hogs    -.07
  • Jun Dlr     -.10
  • Jun S&P     -5.00
  • Jul Crude   -.43
  • Jun Gold    +3.90


View Today’s Chart of the Day

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