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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.
 

Bargain Hunters Provide Support

Jul 26, 2013

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

Markets as of 5:00 AM

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

 

 

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