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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.
 

What Will USDA Tell Us At Eleven?

Mar 31, 2014

Good Morning! Paul Georgy with early morning comments for March 31, 2014 at 4:35 am.  

Grain futures are mixed in quiet overnight trade. The next few hours will give traders a chance to adjust positions before the USDA Quarterly Stocks and Prospective Plantings report at 11:00. Going into today’s session, funds have added to net long positions and corn prices at the CBOT have increased more than 11 cents last week. One would have to assume the trade is positioned for a friendly report.

Trade estimates gathered by Reuters for Quarterly Stock are:

                                          Wheat     Corn    Soybeans
Average trade estimate       1.042    7.099      0.989
Highest trade estimate        1.115    7.540      1.087
Lowest trade estimate         0.985    6.861      0.955

Estimates for the Prospective Planting are:

                                                Corn    Soybean           All      Winter    Spring      Durum
                                                                                   Wheat   Wheat     Other       
Average trade estimate          92.748    81.075        56.277      42.157    12.270      1.794
Highest trade estimate           94.000    83.600        57.711      44.000    13.500      2.200
Lowest trade estimate            90.500   78.500         54.800      41.800    11.000      1.390

Managed Money Funds added 11,427 contracts to long positions in corn last week for a total of 239,287 contracts. They reduced net long soybeans by 13,243 and added 12,456 contracts to long positions in wheat.

Brazilian lawmakers have shot down market rumors of an export tax on oilseeds. They scrapped a proposal to change taxes on soy sales from a bill on taxation of Brazilian companies abroad.

After today’s USDA reports, traders will be focused on the Russian/Ukraine situation and the Chinese economy. Weather conditions and forecasts will also become headline market movers again. Stay in touch by following Ryan Martin, Allendale’s Meteorologist by clicking here.

The Hog and Pigs Report was a shock to many traders as the USDA reduced the hog herd by only 3.3% while the average trade guess was a 5.5% reduction. The recent price rally might suggest professional traders were looking for more than the average decline. Early calls are expecting hog futures to open sharply lower to limit down at 9:05 this morning. Pork cutout values were up .57 on Friday.

Due to the expected weakness in Lean Hog futures, Live Cattle are called lower as well. Packers paid up last week but many are thinking they will be pulling contracts early in April. Beef product has been under pressure causing packer margin to narrow. Beef values closed out the week sharply lower with choice down 4.79 and select down 3.87. The CME Feeder Index is 178.55.

Markets as of 4:35 AM

  • May Corn    -2 1/4
  • May Beans   +1 1/2
  • May Wheat   -5 1/2
  • Apr Cattle  Lower
  • Apr Hogs    Lower
  • Jun Dlr     -.01
  • Jun S&P     +6.00
  • May Crude   -.03
  • Apr 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

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