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December 2013 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.
 

USDA Reports Next “On the List”

Dec 31, 2013

Good Morning! Paul Georgy with early morning comments for December 31, 2013 at 4:30 am.  

Grain futures are quietly mixed. As we enter the last trading day of the year, traders are making last minute adjustments to positions for 2013 and begin to focus on the January 10th USDA Reports. There are four key factors that could have an impact on price direction in those reports: supply adjustments, demand adjustments, grain stocks and planted wheat acres.

Argentina Grain Exchange is expecting 55 mmt of soybeans in the 2013/14 crop compared to 48.3 mmt last year. Corn production is forecast at 22 mmt versus last year’s 26 mmt.

Weather forecast for Argentina’s major crop producing area will be hot and dry for a few days then moisture should relieve any stress on crops.

Brazil soybean producers are starting harvest in the northern region where planting started early, no yield results yet.

The CFTC Commitment of Traders showed Managed Money decreased short positions by 17,051 in corn and by 1,882 contracts in wheat. Managed Money funds reduced long positions in soybeans by 6,633 contracts through last Tuesday.

Cold weather in the upper Midwest is slowing movement of hogs while slowing gains in open confinement facilities. The holiday week is backing up hogs at a time when weights are running above normal. The USDA Hog and Pigs Report did not clear up concerns of PEDv losses. Pork cutout values were up .78 on Monday.

Cattle futures traders are waiting for the next report of cash sales later this week. First of the month featuring at the retail counter could support red meat. Competition from poultry will continue to be a challenge even with tighter supplies of fed cattle. Beef cutout values were sharply higher with choice up 2.72 and select up 4.16. The CME Feeder Index was 164.67.

The next Wake-Up Call will be available on Friday Morning. Markets are closed on Wednesday and will reopen with the pit-trade on Thursday morning.

Have a Joyous and Prosperous New Year!

Markets as of 4:30 AM

  • Mar Corn    – 1/2
  • Jan Beans   -1 1/2
  • Mar Wheat   + 1/2
  • Feb Cattle  +.15
  • Feb Hogs    -.02
  • Mar Dlr     +.08
  • Mar S&P     +1.25
  • Feb Crude   -.41
  • Feb Gold    -2.30

Chart of the Day

COT-Wheat

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

Hog and Pigs Report Suggests No Expansion

Dec 30, 2013

Good Morning! Paul Georgy with early morning comments for December 30, 2013 at 5:00 am.  

Grain futures are lower following weakness in Asia and Europe.

Weekend rains were supportive to crop conditions in South America. Forecasts are for more rains in Argentina and Southern Brazil for the rest of the week.

Export sales were above trade expectations in corn, soybeans and wheat. Corn buyers were some of our regular customers coming back to US as prices have become more competitive.

Ethanol production has been aggressive in recent weeks and is running 11% greater than a year ago. It is likely we will not continue at this pace as the USDA is targeting a 6.5% year over year gain.

Water levels on the Mississippi River at St. Louis are complicating barge movement as water levels could drop further in the coming days.

The dollar is lower off of strength in the euro. Comments by the ECB that there is no need to cut interest rates further has supported euro.

Tomorrow is first notice day for January contracts at the CBOT.

Markets will trade regular hours today and tomorrow, closed on Wednesday reopening on Thursday at 8:30 for grains.

The USDA released the Quarterly Hogs and Pigs Report on Friday afternoon.

                                      Ranges       Average              Actual
All hogs Dec 1            98.6-101.0       99.9                  99.3%
Kept for breeding    100.2-101.9     101.0                 98.9%
Kept for market         98.4-101.1       99.8                 99.4%

The USDA revised down the previous two years of hogs and pigs numbers to match actual slaughter. The numbers imply expansion did not start in 2013. USDA kept the pigs per litter number at large levels which implies no PED based problems. This report is friendly and we would call futures 50 to 75 cents higher on the opening. Pork cutout values were down 3.48 on Friday.

Cash cattle were actively traded at mostly 4.00 higher at 134 to 135. Beef cutout values were higher on Friday with choice up .06 and select was up .84. The CME Feeder Index is 164.14.

I will be at the Northern Illinois Farm Show at 9:00 a.m., January 8th in DeKalb, Illinois. We will share some pre-report thoughts on how the January USDA Report will impact grain prices in 2014. Get a peek on some of the information that will be shared at the Allendale Ag Leaders Conference Webinar on January 28, 29 and 30, 2014.

Markets as of 5:00 AM

  • Mar Corn    -2
  • Jan Beans   -7 3/4
  • Mar Wheat   -2 1/4
  • Feb Cattle  Steady-Higher
  • Feb Hogs    Steady-Higher
  • Mar Dlr     -.14
  • Mar S&P     +.75
  • Feb Crude   +04
  • Feb Gold    -10.80

Chart of the Day

COT-Wheat

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

Bargain Hunters Respond After Sell-Off

Dec 27, 2013

Good Morning! Paul Georgy with early morning comments for December 27, 2013 at 5:00 am.  

Grain futures are higher although wheat is set to post its 4th straight weekly loss.

The confirmation of China rejecting 2,000 tonnes of DDGs is weighing on the corn market. Many traders believe there are more cancellations to come. This could mean backing up of DDGs and less meal usage here at home.

Crush margins are still positive around the world which is keeping support under the January contract. First notice day for the January contract is December 31st.

January option expiration is today at the CBOT.

USDA Weekly Export Sales will be released at 7:30. Trade estimates are: Corn 550 to 750 tmt, soybeans 500 to 750 tmt, Soymeal 50 to 150 tmt, soyoil 0 to 15 tmt and wheat 350 to 550 tmt.

The EIA will be giving us energy stocks at 10:00 and gas storage numbers at 9:30 which have been delayed because of the holiday.

Basis levels at country elevators are steady with a slight pickup in year end farmer movement.

Funds sold an estimated net 6,000 corn contracts, were even in wheat, and sold 4,000 soybean contracts. Index funds are expected to be re-balancing sometime after the first of the year.

Livestock traders are waiting for the Quarterly Hogs and Pigs Report this afternoon at 2:00 pm.

                                      Ranges       Average       Mln head
All hogs Dec 1            98.6-101.0       99.9           66.307
Kept for breeding    100.2-101.9     101.0             5.875
Kept for market         98.4-101.1       99.8           60.435

The full breakdown of estimates can be found on the Allendale Advisory Report at www.allendale-inc.com.

Traders are hoping for answers to the impact of PEDv on the pig crop and how producers are responding to herd expansion due to the disease.

Live hog weights are well above average which is compounding the problem of a couple short work weeks and cleaning up product. Pork cutout values were up .44.

Cash cattle are expected to trade steady to higher this week. Packers are bidding 129, offers 133 to 134. Beef values were mixed with choice up .07 and select down 1.52. CME Feeder Index is 165.26.

STAY at HOME for the Allendale Ag Leaders Conference this year because you can get it live on your home/office computer. Sign up today and get the tax benefits.

Markets as of 5:00 AM

Mar Corn    +1
Jan Beans   +3 1/2
Mar Wheat   -1 1/2
Feb Cattle  +.25
Feb Hogs    +.45
Mar Dlr     -.48
Mar S&P     -2.25
Feb Crude   +.03
Feb Gold    -2.20

Chart of the Day

COT-Wheat

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

Twas the Day Before Christmas and Markets are Quiet

Dec 24, 2013

T’was The Day Before Christmas and Markets are Quiet

Good Morning! Paul Georgy with early morning comments for December 24, 2013 at 4:30 am.

Grain futures are quiet trading in a narrow range near unchanged.

"Merry Christmas to All" on this Christmas Eve!  Markets close early today and volume is expected to be very light. Grain markets will reopen on Thursday at 8:30 and livestock at 9:05 am.

Trading volume was light yesterday with funds estimated buying a net 2,000 contracts of corn and selling 4,000 contracts of soybeans. They were estimated to be even on wheat.

Central IL processor raised basis bids on corn to offer a +2 to futures. They also have been holding soybean bids at 10 over the January futures. Other end-users are saying they have enough inventories through mid-January.

Argentina weather has been getting a lot of attention in recent sessions. The weather models have increased the chances of moisture next week. The heart of the producing area should get beneficial amounts. Corn planting is Argentina is 70% complete compared to 73% normal.

Soybean traders continue to circulate the talk of china canceling bean purchases but there have been no confirmations. Crush margins around the world are positive providing underling support to January futures.

The technical trading range is 13.10 to 13.50 in the January soybean contract. The March corn contract 50 day moving average is a key resistance point to watch in light volume trade.

Seasonal traders are looking at historical patterns and expecting a rally in grains between Christmas and New Year’s.

Cold Storage report found 546.3 million pounds of pork in warehouses at the end of November which was very close to the average trade guess of 549.2 million pounds. Stocks draw down of 19 million pound for the month was near the average of 17. Lean Hog traders have their eye on the Quarterly Hogs and Pigs Report due to be released on Friday at 2:00 pm. They hope to get some answers to the seriousness of the PEDv. Pork cutout value was down .19 on Monday.

Beef on the cold storage report showed 445.0 million pounds in warehouses on December 1st. That was less than the 454.5 million pound average guess. Choice beef values were down .10 and select was up 2.09.

The next Wake-Up Call will be released on Friday morning, Have a Safe and Joyous Holiday,

Markets as of 4:30 AM

Mar Corn    - 1/4

Jan Beans   +2 3/4

Mar Wheat   -1 1/4

Feb Cattle  +.20

Feb Hogs    +.10

Mar Dlr     +.10

Mar S&P     +1.00

Feb Crude   +.04

Feb Gold   +.20

 

Cattle on Feed 5.5% Less Than Last Year

Dec 23, 2013

Good Morning! Paul Georgy with early morning comments for December 23, 2013 at 5:00 am.  

Grain futures are quiet with corn and wheat near unchanged. Soybeans are stronger on near-term supply concerns. Crush margins are good as meal demand is the driver.

We’ll release our full 2014 price outlooks at our conference next month. Get full details on the conference here.

Trading volume will be light this week. Grain markets close at noon tomorrow and will reopen on Thursday at 8:30 am.

Trade will be watching for sales announcements at 8:00 am and any confirmation on the status of the China GMO situation.

Weather forecasts have added a little more rain in Argentina compared to what was expected when we went home on Friday.

Managed Money funds increased short positions in corn by 12,629 and wheat by 2,253 contracts. They added to long positions in soybeans by 9,451 contracts.

In outside markets the dollar is lower and gold is trading again below $1200.

The Cattle on Feed report was neutral to friendly. Total number of cattle on feed was 94.5% of a year ago and placements were 96.9% which was below trade expectations of 100.4%. Less cattle to place, better wheat pastures and holding back breeding stock could be the reasons for the lower placement number.

Beef cutout values were lower with choice down .92 and select down .35. The CME Feeder Index is 166.53.

Pork cutout value was down 1.07 on Friday. Hog slaughter data will be watched closely over the next few weeks as the holiday-shortened work week could back up some hogs.

Calls for the livestock opening would be steady to higher for cattle and steady for lean hogs.

Have a Joyous and Safe Holiday Season!

Markets as of 5:00 AM

  • Mar Corn    – 1/4
  • Jan Beans   +4
  • Mar Wheat   -1 1/4
  • Feb Cattle  Steady-Higher
  • Feb Hogs    Steady
  • Mar Dlr     -.12
  • Mar S&P     +8.00
  • Feb Crude   -.37
  • Feb Gold    -9.30

 

Chart of the Day

COT-Wheat

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 Wheat Close At New Contract Lows Again?

Dec 20, 2013

Good Morning! Paul Georgy with early morning comments for December 20, 2013 at 5:00 am.  

Grain futures are mixed in a quiet trade. Corn and wheat are lower while soybeans are higher.

The March wheat contract has closed at new contract lows 7 out of the last 8 trading sessions. It opened at new contract lows overnight. World supply and liquidation of the long wheat/short corn spread that had been popular up until a few weeks ago is causing some of the pressure. Argentina raised their wheat production estimate from 8.5 to 9.0 mmt. The Argentine government has not given approval to resume wheat exports. Technical indicators are showing oversold and position squaring could happen at any time, manage your risk.

Traders are definitely in the "holiday mode". Volume was respectable yesterday at the CBOT however most of the volume was in the soybean complex. Demand for soybeans and the logistical issues are the recirculating news items.

Export sales were above trade expectations for corn and wheat while soybeans were lower than expected. Soybeans, for this marketing year, are 97% sold versus a normal sales pace of 73%.

Basis levels at the Gulf are steady for soybeans and a little weaker for corn. Midwest basis for soybeans slipped about 5 cents at most locations.

The South American weather forecast remains the same however some models are suggesting a drier trend developing which is creating some short covering in corn and soybeans.

On the economic front, existing home sales declined for the third straight month. Today we get 3rd Quarter GDP at 7:30 am.

Get your 2014 grain and livestock outlooks at our Annual Ag Leaders Conference. The entire event is online at the end of January. Click here for details.

We will get the Cattle on Feed Report this afternoon at 2:00 pm. Trade guesses are: On-Feed 95.4% Placed 100.4% and marketings 96.7% of year ago. Cash cattle traded in the South at 130 yesterday. The same near-term demand issues and shortened work weeks continue to weigh on cattle and hog futures markets. Beef cutout values were mixed with choice down .47 and select up .40. CME Feeder Index is 166.90. Pork cutout values are 2.59.

Markets will close early on Tuesday and resume trading on Thursday morning at 8:30 for grains and 9:05 for livestock.

Everyone at Allendale would like to wish all readers, customers and friends a Happy and Safe Holiday!

Markets as of 5:00 AM

  • Mar Corn    -2 1/4
  • Jan Beans   +3 1/4
  • Mar Wheat   -2
  • Feb Cattle  +.25
  • Feb Hogs    -.27
  • Mar Dlr     +.03
  • Mar S&P     +2.25
  • Feb Crude   -.24
  • Feb Gold    +1.80

Chart of the Day

COT-Wheat

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

What Will Traders Focus On Today?

Dec 19, 2013

Good Morning! Paul Georgy with early morning comments for December 19, 2013 at 5:00 am.  

Grain futures are slightly higher on bargain hunting and position squaring ahead of the holiday.

The South American weather forecast is for more of the same favorable conditions for another record crop. Models add more rain in the forecast for Argentina however the southwestern growing areas are a little dry.

Allendale Ag Leaders Conference is coming to you online this year. All the details are available here.

Weather patterns suggest no bitter cold temperatures that could pose threat to winter wheat crop in US through the end of the year.

Iraq’s state grain board has purchased 350,000 tonnes of wheat, all of Australian origin.

The Argentine exporters are waiting for the go ahead to begin movement of grain. Brazil needs wheat now and will have to shop elsewhere if Argentina can’t deliver.

Trade estimates for weekly export sales data which will be released at 7:30 am are: corn 550 to 750 tmt, soybeans 700 to 900 tmt, soymeal 150 to 300 tmt, soyoil 10 to 30 tmt and wheat 300 to 400 tmt.

Ethanol production is 10% higher year over year. USDA, this month, raised its corn for ethanol projection by 50 million bushels. They now see a goal of a 6.5% increase over last year. Profit margins are running at a positive 31%.

Informa’s acreage estimates for next year’s corn planted acres were raised slightly to 91.846 million acres and they lowered the soybean acres by 1.9 million to 81.929 million acres. In 2013 US farmers planted 95.341 million acres of corn and 76.49 million acres of soybeans.

The Fed is going to begin tapering QE3 by 10 billion dollars a month. This is the number much of trade was expecting.

Cattle on Feed report Friday afternoon at 2:00 pm. Trade estimates for on-feed has a narrow range with an average of 95.4% of a year ago. If this holds true it would be the lowest December 1 cattle feedlot inventory in 17 years. Placement numbers have more variation as traders balance the cheaper feed cost with higher feeder cattle prices and better pasture conditions. The outlook still would suggest tight fed cattle supplies through midyear.

Cash cattle traded at 129 in NE and beef cutout values were slightly lower. Choice was down .25 and select was down .40. The CME Feeder Index is 167.36.

Pork product values are under pressure going into year end. The heavy weights and short work weeks have traders expecting even larger numbers after the holidays. Pork cutout values were down 1.98 on Wednesday.

Markets as of 5:00 AM

  • Mar Corn    + 1/4
  • Jan Beans   – 1/2
  • Mar Wheat   + 3/4
  • Feb Cattle  -.07
  • Feb Hogs    -.25
  • Mar Dlr     +.42
  • Mar S&P     -2.00
  • Feb Crude   +.03
  • Feb Gold    -30.30

Chart of the Day

COT-Wheat

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 Fed Taper QE3?

Dec 18, 2013

Good Morning! Paul Georgy with early morning comments for December 18, 2013 at 5:00 am.  

Grain futures are mixed as we see some back and fill attitude this morning.

Catch Drew Lerner’s 2014 Weather Outlook during Allendale’s Ag Leaders Conference Series. This presentation is exclusively live and will not be recorded!

Traders are cautious ahead of the US Federal Reserve’s announcement of meeting minutes at 1:00 pm today. A newswire survey of traders and analysts suggests about 40% are expecting some tapering of QE3.

Hopes of improving demand seem to be the driver in corn and soybean markets. South Korea said they will take corn earlier than previously committed which helps exporters deal with corn rejected by China.

Midwest basis is drifting lower as futures prices rally. Cash grain buyers are reporting a pickup in soybean movement yesterday when Jan futures hit 13.50.

Weather forecast for South America is a little dryer however that will be needed to finish up planting.

Wheat futures remain under pressure as wheat buyers turn to EU for supply. The US wheat is overpriced compared to EU and Russian supplies.

View our latest Ag Leaders Webinar. What are some of the grain demand issues we’ll be talking about in 2014?

Secretary Vilsack will be meeting his Chinese counterpart on Friday for their annual meeting. One would have to expect some discussion on the rejections of US corn imports.

Soybeans remain in a trading range between 13.00 and 13.50. March Corn has support at 4.18 ½. Seasonal traders are expecting a rally from Christmas to New Year in corn.

Index fund rebalancing is expected to start in early January.

Beef cutout values were mixed with choice down 1.54 and select up .37. Pork cutouts were down .11. Demand for product during the holiday season is slow as specialty items are featured. Look for choppy markets as traders are in the holiday mode.

Markets as of 5:00 AM

  • Mar Corn    + 1/4
  • Jan Beans   +2
  • Mar Wheat   -3 3/4
  • Feb Cattle  +.10
  • Feb Hogs    +.67
  • Mar Dlr     +.02
  • Mar S&P     +6.25
  • Jan Crude   +.08
  • Feb Gold    +.80

Chart of the Day

COT-Wheat

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 China Rejecting Corn A Big Deal?

Dec 17, 2013

Good Morning! Paul Georgy with early morning comments for December 17, 2013 at 4:30 am. Grain futures are steady to lower led by profit taking in the soybean complex.

Corn basis is down 2 to 5 cents while soybean basis was down 3 to 5 cents. The rail backup and river closures have been cited as reasons for weakness. Farmer movement is limited.

Export shipment data yesterday was supportive as soybeans saw 62.5 million bushels shipped. Soybean sales are running at 96% of USDA expected exports compared to 71% normal. Corn was on the light side of expectations. With all the talk about China rejecting US corn, we looked at how much corn sales could be impacted. China is the 3rd largest importer of US corn. They have purchased 5.7 mmt of corn which 3.7 mmt still has to be shipped.

South Korea purchased 65,000 tonnes of US corn overnight.

NOPA crush data showed a very aggressive pace for November at 160.1 million bushel. This represents a 2% increase from last year however the first quarter of this marketing year averaged 1.1%. The USDA’s target is only a 0.1% increase from last year.

USDA Secretary Vilsack is headed to China for a meeting on December 20th. The USDA is saying this is a meeting that has been scheduled for some time and not called because of China rejecting corn imported from US.

Traders are now estimating a 40% chance of some type of tapering announcement on Wednesday by the FED.

Technical support in March corn is 4.18 1/2. Nearby soybean futures are testing resistance and upper end of trading range.

Beef came out "of the chute" strong on Monday which has promoted some buying interest in live cattle futures. We suspect some fill in buying by retailers as they plan for post-holiday featuring.

Hog farmers are expanding herds as sow slaughter is 6.4% below year ago levels. Increasing competitions for pork and beef are slowing price rallies as supply numbers decline.

Beef cutout values were higher with choice up 1.08 and select up 1.40. The CME Feeder index is 168.32.

Join us for the Monthly Ag Leaders Webinar tonight at 8:00 pm on December 17, 2013. Get a wrap-up outlook for the year. Sign up NOW.

Markets as of 4:30 AM

  • Mar Corn    – 1/4
  • Jan Beans   -6 1/4
  • Mar Wheat   – 1/2
  • Feb Cattle  +.05
  • Feb Hogs    +.20
  • Mar Dlr     +.01
  • Mar S&P     -1.75
  • Jan Crude   -.23
  • Feb Gold    -7.70

 

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 Look For Friendly News

Dec 16, 2013

 

Good Morning! Paul Georgy with early morning comments for December 16, 2013 at 5:00 am.  

Grain futures are lower on follow through selling from Friday and the lack of positive news.

Grain markets are faced with several issues this week. Trading volume is expected to get lighter as we approach Christmas week with a shortened session next Tuesday and markets closed a week from Wednesday. We have the issue of China turning back cargoes of corn and possible rejection of DDGs which indirectly creates competition for soybean meal. We will hear more talk from our government representatives as they go back home to their districts for the holidays.

The bill proposed by a bipartisan group of senators last week to eliminate the biofuels mandate will arouse more conversation and concerns of traders.

Weather conditions remain favorable for most of South America however Argentina is expected to be dry for the next week.

Farmers have no incentive to sell any cash grain before the first of year as futures prices work lower. Basis was steady on Friday.

The FOMC meeting results on Wednesday will be watched closely for any signs of tapering.

Technical traders will be keying off of the weak close on Friday in corn and wheat to keep the pressure on at least early in the week. March corn has support at 4.18 ½ while March wheat set new lows for the recent move overnight.

Soybeans were able to hold the 20 day moving average which now could provide near-tern support.

The livestock markets are struggling with weak demand for product as beef and pork prices slide. Choice beef was down 1.56 and select was up .39. Pork cutout values were down 1.15 on Friday. Cash cattle traded late on Friday at 131 which was steady to 1.00 lower than last week. The CME Feeder Index was 167.80. We would have to give the livestock a steady lower call for this morning’s opening.

 Join us for the Monthly Ag Leaders Webinar which will be held at 8:00 pm on December 17, 2013. Get a wrap-up outlook for the year. Sign up today.

Markets as of 5:00 AM

  • Mar Corn    -3 3/4
  • Jan Beans   -6 3/4
  • Mar Wheat   -4
  • Feb Cattle  Steady-Lower
  • Feb Hogs    Steady-Lower
  • Mar Dlr     -.20
  • Mar S&P     +7.50
  • Jan Crude   +.45
  • Feb Gold    -5.90 
Chart of the Day

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

 

Holiday Markets Present Opportunity For Volatility

Dec 13, 2013

Good Morning! Paul Georgy with early morning comments for December 13, 2013 at 5:00 am.  

Grain futures are lower on follow-through selling. The technical and fund selling started yesterday after the release of strong export sales data. The algorithm traders jumped on the recirculating of old news with some new twists. Will we see more profit taking today or a quiet session?

The December contracts at the CBOT go off the board today at Noon, Central Time.

Talk of possible DDGs being canceled by China has meal and soybean traders concerned. If China doesn’t take DDGs (a byproduct of ethanol production) it now begins to compete with soymeal here at home.

Farm Bill negotiators say they will be able to work out a deal in January when the new session begins.

Midwest cash corn and soybean basis bids were steady on Thursday afternoon. But river bids at Morris, IL dropped 4 cents to +11F, corn bid at Council Bluffs, IA dropped 3 to -5H.

Funds were estimated to be net sellers of 7,000 corn contracts, 3,000 wheat contracts and 9,000 soybean contracts.

Beef cutout was lower again on Thursday with choice down 1.05 and select down .21. Weaker product is pushing packer margins deeper in the red. We still have a stand-off between packers and feedlots. Trade is hoping for at least a steady trade this week. Feeder cattle prices in futures and cash markets are benefiting from lower corn values. CME Feeder Index is 167.54.

Hog weights remain at record high levels while product demand is sluggish. Pork cutout values were down 2.27 on Thursday. As December contract nears expiration, the February contract will be judged on its premium to the cash index. PEDv cases jumped by 140 cases for the report from the last week in November.

 Join us for the Monthly Ag Leaders Webinar which will be held at 8:00 pm on December 17, 2013. Get a wrap-up outlook for the year. Sign up today.

Markets as of 5:00 AM

  • Mar Corn    -2 3/4
  • Jan Beans   -6 1/2
  • Mar Wheat   -3
  • Feb Cattle  +.22
  • Feb Hogs    -.15
  • Mar Dlr     +.19
  • Mar S&P     +6.75
  • Jan Crude   -.45
  • Feb Gold    -1.10
Chart of the Day

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 Upside Is Left In Short Term Uptrend?

Dec 12, 2013

Good Morning! Paul Georgy with early morning comments for December 12, 2013 at 5:00 am.  Grain futures are lower on profit taking.

Traders are looking for exports to help support the recent rally in grain futures. Estimates for this morning’s weekly export sales are: corn 600 to 750 tmt, soybeans 750 to 950 tmt, soymeal 100 to 200 tmt, soyoil 0 to 30 tmt and wheat 300 to 500 tmt.

Ethanol production last week was the highest level since Dec of 2012. Ethanol production profits are strong as exports and demand for DDGs drove crush. Current year to date production is now 9% above a year ago and USDA is expecting a 5% increase year over year.

There are reports of a processor offering free DP for corn delivered between now and January 1. This kind of move could fill some immediate needs and destroy basis. Heavy movement of grain is expected in early January as farmers deal with tax issues.

Price differences between US and Brazilian soybeans for March/April is growing in favor of Brazil as ideal weather increases crop size.

Volume was light at the CBOT yesterday with funds buying an estimated net 1,000 wheat contracts, 4,000 corn contracts and 3,000 contracts in soybeans.

Seasonal and technical buyers continue to support corn and soybeans on dips. The two week uptrend in corn has resistance at 4.40 and then 4.49. The January soybean contract has been in an uptrend now for 6 weeks with resistance at 13.53 ½. Wheat is oversold but still in a downtrend based on the chart picture.

Poor profit margins and demand disruption because of the east coast snow storm has packers bidding 129 to 130 while feedlots are asking 133 to 134 for cattle. Futures traders are waiting for cash sales to give them direction for the balance of week. Beef cutout values were mixed with choice up .49 and select down .91. The CME Feeder Index is 166.33.

IA/MN hog weights continue to set new record highs for the sixth straight week. Any loss of numbers is being offset by the heavier weights. Fund selling and premium of Feb futures to cash index is keeping pressure on the February contract as December expires on Friday. Pork cutout values were down 1.25 on Wednesday afternoon.

 Join us for the Monthly Ag Leaders Webinar which will be held at 8:00 pm on December 17, 2013. Get a wrap-up outlook for the year. Sign up today.

Markets as of 5:00 AM

  • Mar Corn    -1 1/2
  • Jan Beans   -6 3/4
  • Mar Wheat   – 1/4
  • Feb Cattle  -.05
  • Feb Hogs    +.20
  • Mar Dlr     +.06
  • Mar S&P     -.75
  • Jan Crude   +.13
  • Feb Gold    -13.80
Chart of the Day

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USDA Raises Export Targets

Dec 11, 2013

Good Morning! Paul Georgy with early morning comments for December 11, 2013 at 5:00 am.  Grain futures are higher on short covering and positive USDA demand.

The USDA increased the export demand for corn by 50 million bushels and soybeans by 25 million bushels. However the increase in ethanol demand by 50 million bushels was a surprise for the trade. Offsetting the increase in demand, the USDA raised imports of soybeans by 10 million bushels and corn by 5 million bushels. Traders already are worried about adjustments the USDA may make on the January report. Questions already being asked are: How much will USDA raise yield? What will quarterly stocks be for corn and soybeans?

USDA raised the soybean production for Argentina by 1 million which was in line with trade expectations. However they left the Brazilian production unchanged leaving room for change in January.

The next few weeks will have limited news events in the US as Congress will be on holiday and traders even up their books for year end.

Ag bill negotiators end a session yesterday that left the Republicans wanting a one month extension to the current law and the Senate Ag Chairman Stabenow saying she will let the old law expire.

US Congressional Budget negotiators reach a 2 year agreement aimed at avoiding another government shutdown.

Cash market strength has been a big part of the reason for the rally in nearby corn and soybean futures contracts. Farmers have a tendency of starting to move grain the last few weeks of December taking payment in early January. This could have a considerable impact on basis as the new year approaches.

The snow storm on the east coast has livestock traders concerned about meat demand. Cash cattle trade is now expected to develop at steady to lower prices. Beef cutout values were lower with choice down .40 and select down .11. The CME Index is 166.24.

The December futures contract goes off the board on Friday and is currently discount to the cash index. Feb futures are being tugged lower because of the premium to the current cash price. Pork cutout values were up 1.47 on Tuesday.

Join us for the Monthly Ag Leaders Webinar which will be held at 8:00 pm on December 17, 2013. Get a wrap-up outlook for the year. Sign up today.

Markets as of 5:00 AM

  • Mar Corn    +1 3/4
  • Jan Beans   +5 3/4
  • Mar Wheat   +4 1/2
  • Feb Cattle  +.27
  • Feb Hogs    +.12
  • Mar Dlr     +.01
  • Mar S&P     -1.25
  • Jan Crude   -.02
  • Feb Gold    -6.60
Chart of the Day

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

Trade Waits For USDA Report Results

Dec 10, 2013

Good Morning! Paul Georgy with early morning comments for December 10, 2013 at 4:30 am.  Grain futures are mixed as traders adjust positions going into the USDA report later today.

The December USDA Supply and Demand report is the focus of the trade as we approach the 11 AM release time. The trade average is for a reduction of 17 million bushels in soybean stocks however many analyst believe it could be even larger. The current pace of soybean exports and the USDA announcement yesterday of more purchases by China when many were expecting cancellations has bulls feeling good. Be aware that 5 out of the last 6 years final demand did not meet USDA Dec estimate.

The recent import issue with China over the contamination of corn shipments with an unapproved GMO strain has traders less confident in a large change in ending stocks estimate on today’s report. Remember the USDA will not change the production number, they will wait until January for those adjustments.

Traders will be watching world numbers, more specifically adjustments in the Brazil and Argentina corn and soybean production. Analysts out of those countries have increased soybean and corn production because of favorable weather conditions.

AgRural, an analyst in Brazil is reporting nationwide soy planting advanced 4 percentage points from the previous week and was 94 percent complete as of Dec. 6.

PED disease is still spreading rapidly in Iowa and Minnesota with Nebraska now reporting cases. Feeder prices have jumped due to pig availability. December lean hog contract is staying close to cash index due to last trading day on Friday. The deferred contracts are being supported by fund buying. Pork cutout values are down .14.

Beef cutout values were higher with choice up 1.05 and select up 1.14. The strength in beef prices is providing support to the idea that packers will pay more for live cattle this week. Fund buying could provide support this week. Check in with Allendale’s YouTube updates to get Rich Nelson’s comments around noon.

Markets as of 4:30 AM

  • Mar Corn    -2 1/4
  • Jan Beans   -1 1/4
  • Mar Wheat   -3 1/4
  • Feb Cattle  -.17
  • Feb Hogs    -.07
  • Mar Dlr     -.02
  • Mar S&P     +1.50
  • Jan Crude   +1.22
  • Feb Gold    +9.30
Chart of the Day

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

Grains Firm On Cold Weather Forecast

Dec 09, 2013

Good Morning! Paul Georgy with early morning comments for December 9, 2013 at 5:00 am. Grain futures are higher as cold weather forecast provides underlying support.

US winter wheat area was hit with ice and extremely cold temps over the weekend and extreme cold temps are expected to be around most of this week. Traders are talking about potential winterkill but we will not see the true effect until spring. Weather conditions in South America, on the other hand, remain favorable to growing crops. The weekend rains should be enough to maintain crops during a week with warmer temps in the forecast.

Traders will have to deal with several factors this week. The USDA will release the December Supply and Demand report on Tuesday which many are expecting an upward adjustment in demand and a reduction in ending stocks. Our research suggests the USDA will make very minimal changes if any. Many are now thinking we are past the peak Chinese buying of US soybeans. And the calendar is suggesting we could see more movement of grain in the US as farmers take advantage of year-end tax planning.

Technical reversal patterns posted last week could motivate more buying in corn and selling in soybeans and wheat. Chart resistance in corn crosses at 4.39 and 4.49 in March corn. January soybeans have consolidated into a range between 13.46 and 13.11. March wheat closed out last week settling on major support at 6.47 ¾.

Managed Money funds were buyers in most contracts at CBOT. They reduced short corn positions by 22,237 and wheat by 2,028 contracts. Funds added to long soybean positions by 4,910 contracts.

Livestock futures at CME saw sharp moves last week as funds adjusted positions. Lean Hogs sold off early in the week and bounced off the 100 day moving average on Friday. Live cattle sold off late in the week with support at 132.32 in the Feb contract. Managed Money funds added 11,436 contracts to their already long position in Live Cattle. Cash markets should provide some direction to futures as week progresses. Beef cutout values were lower on Friday with choice down .94 and select down 2.64. The CME Feeder Index is set at 165.79. Pork cutout values were up .99. We would have to call live cattle steady lower and lean hog futures steady higher.

Markets as of 5:00 AM

  • Mar Corn    +1 1/2
  • Jan Beans   -+6 1/4
  • Mar Wheat   +2 1/4
  • Feb Cattle  Steady-Lower
  • Feb Hogs    Steady-Higher
  • Mar Dlr     -.06
  • Mar S&P     +.50
  • Jan Crude   +.14
  • Feb Gold-1.30

 

Chart of the Day

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 China Done Buying US Grain For A while?

Dec 06, 2013

Good Morning! Paul Georgy with early morning comments for December 6, 2013 at 5:00 am.  Grain futures are mixed as traders adjust positions going into the weekend.

Weather is not really a factor in South America at this time as rain systems move across the crop growing areas every 5 to 7 days. Southwestern Argentina is reportedly a bit dry but not a major impact on the big picture.

Exports for last week were less than trade was expecting but sales are still on a very aggressive pace. US exporters have sold 73% of USDA’s whole-year goal for corn compared to 50% for the five year average. Soybean sales have reached 95% of USDA goal compared with 69% five year average. Wheat sales are 76% of USDA estimate compared with a 70% five year average. With this aggressive sales pace the USDA may make some adjustments to the export targets on the balance sheet. We are reminded that historically USDA makes minimal changes to corn and soybean balance sheets on the December report; they wait until January to make major revisions.

Agroconsult says Brazil should produce a record 90.7 mmt of soybeans and 76.1 mmt of corn. That compares to their last estimate of 86.0 mmt of soybeans and 75.7 mmt of corn.

A major index fund roll starts today, traders are watching the Jan/March meal spread as it is estimated that nearly 50,000 contracts will be moved in the next 5 sessions.

There has been more talk of Argentina reducing its export tax from 35% to 20% for 90 days in order to get farmers to move soybeans.

The monthly employment report covering November will be released later this morning. Trade is expecting it to show an 180,000 increase in non-farm payroll. Last month saw an increase of 204,000. Total unemployment is expected to drop to 7.2% vs. last month’s 7.3%.

Pork exports were 12% below a year ago and imports were down 16% during October. Beef exports during October were 5% higher than a year while beef imports increased 30% from the same period a year ago. Chicken exports have picked up pace by increasing 4% over last year. Livestock futures rally has stalled due to technical and fund selling. Lean hog futures and cash index has come in line. Traders are now waiting for hog supplies to tighten. Pork cutout values were .14 higher.

Cash cattle traded at 132 on Thursday which would be steady with last week. Beef cutout values are lower with choice down .89 and select down .42. CME Feeder Index is 165.22.

Markets as of 5:00 AM

  • Mar Corn    +2 1/2
  • Jan Beans   -5 1/4
  • Mar Wheat   +2 1/4
  • Feb Cattle  +.07
  • Feb Hogs    -.07
  • Mar Dlr     +.11
  • Mar S&P     +7.00
  • Jan Crude   -.13
  • Feb Gold    -2.10
Chart of the Day

If you have any questions on any of our material, give us a ca

Grains Slide On Profit Taking

Dec 05, 2013

Good Morning! Paul Georgy with early morning comments for December 5, 2013 at 5:00 am.  Grain futures are lower as fundamental news battles a positive technical picture. The higher prices yesterday are being met with some profit taking this morning. Light volume is also increasing the volatility in prices at the CME.

Weekly export sales report will be released this morning at 7:30. Trade estimates are: corn 850 to 950 tmt, soybeans 900 tmt to 1.2 mmt, soymeal 250 to 300 tmt, soyoil 20 to 40 tmt and wheat 450 to 550 tmt.

Though ethanol production fell in the latest week it is still posting a very strong pace, much better than USDA’s whole-year estimate. Allendale is currently leaving its estimate of corn for ethanol unchanged. USDA will do the same on next week’s supply/demand report.

The EPA hearing on its proposed changes to the Renewable Fuels Standard is scheduled for today between 9:15am to 9:00 pm ET.

Estimates for next week’s crop report have been released by the newswires which suggest trade is expecting USDA to lower ending stocks on domestic wheat, corn and soybeans.

Canada raised its wheat production 4.5 mmt from their last estimate and Australia raised their crop by 1.7 mmt. Right now, US wheat prices are more competitive on the world markets which improves chances of getting some export business.

As it stands right now this week’s hog slaughter is running 1.6% over last year. This is a tough pill to swallow when all the trade has heard for months is how bad the PED issue would hit in December. The premium of futures to cash is weighing on nearby contracts. Pork cutout values were down 1.82 on Wednesday. 

Cattle country is still talking about steady to possibly higher trade for this week. Wholesale beef hit $200 for two separate weeks in November but has not been able to post a weekly close clearly above that mark. Beef cutout values were higher with choice up .30 and select up .09. The CME feeder Index is 165.36.

Markets as of 5:00 AM

  • Mar Corn    -4 1/4
  • Jan Beans   -6 3/4
  • Mar Wheat   -5 1/2
  • Feb Cattle  +.02
  • Feb Hogs    -.37
  • Mar Dlr     -.03
  • Mar S&P     -.25
  • Jan Crude   +.35
  • Feb Gold    -12.50
Chart of the Day

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 Grind Through Resistance?

Dec 04, 2013

Good Morning! Paul Georgy with early morning comments for December 4, 2013 at 5:00 am.  Grain futures are mixed as China cancels more corn shipments and Paris wheat sets a six month high.

Corn futures are giving back some of yesterday’s gains on China’s rejection of more corn after finding it contained an unapproved GMO variety. Corn also is backing away from an important chart point in the March Contract.

Traders have been shying away from buying nearby soybean futures as there is concern that China may cancel some cargoes. Our research suggests they could but probably not for several weeks. China will likely wait until they are more confident that South America has a bean crop.

World Weather Inc. is expecting favorable weather for much of South America over the next 2 weeks.

Soybean crush margins remain positive in US, South America and China on good meal demand.

Corn basis levels were steady to higher as the rally stalls movement. Year end tax planning and hopes of higher prices contribute to farmer’s decision making.

There were no deliveries on the December corn and December meal. December wheat had another 607 contracts delivered partially through 12/2/2013.

Stats Canada’s report is out later this morning. The Argentina Ag Ministry reduced their wheat production to 8.2 mmt from the last estimate of 8.5 mmt. Informa kept their estimate the same at 9.8 mmt and USDA will give us their number on Dec 10 versus the last estimate of 11 mmt.

Farm bill negotiators are expected to meet today to try and break the deadlock over food stamp cuts and subsidizing crop insurance.

Funds and technical selling is attributing to the sell-off in lean hog futures. Weaker cash markets are not helping trader’s attitude with several dollar premiums of futures to cash index. Pork cutout values were down .54 to 90.99.

Cattle futures held support however traders are talking about near record highs of product. Can it sustain these levels going into holidays? Beef cutout values were lower on Tuesday with choice down .06 and select down 1.53. The CME Feeder Index was 166.53.

Markets as of 5:00 AM

  • Mar Corn    -2 1/4
  • Jan Beans   +2 3/4
  • Mar Wheat   +1 3/4
  • Feb Cattle  -.02
  • Feb Hogs    -.02
  • Mar Dlr     +.04
  • Mar S&P     +1.75
  • Jan Crude   +1.14
  • Feb Gold    -8.50
Chart of the Day

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 China Really Cancel Soybean Purchases?

Dec 03, 2013

Good Morning! Paul Georgy with early morning comments for December 3, 2013 at 4:30 am. Grain futures are higher on bargain hunting.

China cancelling cargoes of corn because of GMO contamination has soybean traders banking profits. Will China cancel soybean purchases as well? Last week’s export sales report had soybean commitments at 93% of USDA’s yearly sales projection. Looking back to last year, export sales dropped sharply beginning in early December. The demand side of the equation will be very important until the January Supply and Demand and Quarterly Stocks reports.

Corn futures set lows on Monday not seen since June of 2010. Bargain hunters are helping corn rally off the lows and giving technical traders a "ray of hope" as charts suggest a potential reversal pattern.

Spread traders are talking about a seasonal adjustment to the wheat-corn spread which has widened to near record price difference in recent weeks. Call your Allendale Broker to discuss the opportunities of this spread.

Corn basis has slipped as some end-users are moving bids to the March contract from December.

Weather conditions in South America are favorable now but a long growing season ahead could provide for some excitement in US futures markets, stay in close touch with the Allendale Advisory Report.

Argentina’s Planning Minister announced an increase in biodiesel blend for domestic use from 8% to 10%. He also ordered the country’s thermo-electric plants to use biodiesel.

A US Ag attaché is suggesting the Argentina soybean production could be as much as 4 mmt larger than the latest USDA estimates due to large soybean plantings and favorable weather conditions.

Cattle futures continue to consolidate ahead of first notice day which is next Monday. Cash cattle are expected to trade steady to higher this week as supplies of market ready cattle remain tight and the weather forecast is for cold temps to move into cattle feeding areas. A close above 133.50 in December futures sets the stage for a retest of recent highs of 134.50. Beef cutout values were higher with choice up .18 and select up 1.07. The CME Feeder Index is 165.88.

Reports of PEDv on hog farms continue to rise which could impact supplies on market ready hogs in the April through June 2014 period. From the time of first reported cases of this virus, it would suggest slaughter numbers should be declining in early December. Pork cutout values were up 1.72 on Monday.

Markets as of 4:30 AM

  • Mar Corn    + 1/2
  • Jan Beans   +2
  • Mar Wheat   +1 1/2
  • Feb Cattle  +.32
  • Feb Hogs    +.15
  • Mar Dlr     -.19
  • Mar S&P     -4.00
  • Jan Crude   +.21
  • Feb Gold    -3.60
Chart of the Day

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 Long Can Soybean Demand Drive Prices?

Dec 02, 2013

Good Morning! Paul Georgy with early morning comments for December 2, 2013 at 5:00 am.  Grain futures are mostly higher this morning in the front month contracts. The strength is coming from demand for US supplies of corn and soybeans by crushers and exporters.

Soybeans continue to lead the charge as traders are expecting an increase in soybean exports for the 2013/14 marketing year because sales are currently 93% of USDA forecast. Soybean basis remains seasonally strong as crush margins are positive due to meal demand.

Corn traders are looking for markets to remain weak into end of year unless new news develops in the next few weeks. Ethanol margins remain positive for crushing however many plants have enough corn around them for the next 30 days. The next major USDA report is not until mid-January.

Wheat demand is good in the world market as several countries are looking for supplies. Wheat had 724 contracts of new deliveries through November 27, 2013 and there were no corn deliveries.

Wednesday Stats Canada and Australia Wheat Board will issue reports.

South American weather forecast continues to be favorable for crops in most areas.

Managed Money increased short position in corn by 7,000 to 146,086 and increased short positions in wheat by 8,000 contracts to 55,199 net short. They increased long positions in soybeans by 8,500 contracts to make them net long 129,393. Non-commercial traders now hold a record short position in wheat.

Technical support in the March corn contract is 4.20 with last week’s high as resistance. January soybeans should find some resistance near 13.50. Check in with Allendale Advisory Report for full details.

Cash cattle traded 1.00 to 2.00 higher last week. Trade is looking for steady to higher cash as packers go back to a full work week. Product demand will be watched closely with beef prices above 200 and first of month features. Beef cutout values were higher on Friday with choice up .33 and select up .21. The CME Feeder Cattle Index is 164.63.

Managed Money reduced long contracts in lean hogs and cattle each by more than 10,000 contracts.

The discount of cash index to futures is weighing on prices however traders are watching slaughter supplies. Analyst are expecting seasonal supply peaks behind us and looking ahead for the effects of last summer’s PEDv losses. Pork cutout values were up 1.01 on Friday. Look for higher opening calls for livestock.

Markets as of 5:00 AM

  • Mar Corn    – 3/4
  • Jan Beans   +7 1/4
  • Mar Wheat   +2 1/2
  • Feb Cattle  Steady-Higher
  • Feb Hogs    Steady-Higher
  • Mar Dlr     +.24
  • Mar S&P     -1.25
  • Jan Crude   -.06
  • Feb Gold    -12.60
Chart of the Day

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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