Allendale Inc has researched the Time Line of H5N1 Bird flu impact on corn futures from month previous to major event to month following. To view chart click here

 

1997 Dec, after 6 reported deaths in Hong Kong- it destroys entire poultry flock

Corn futures price

Nov 271 Dec 265 Jan (1998) 273, result of a 2 cent increase

 

2003 Feb, H5N1 reappears in Hong Kong, with a reported death

Jan 238 Feb 232 Mar 236, result of a 2 cent decline

 

2004 Jan, 1^st reported death Vietnam from H5N1

Dec 246 (2003) Jan 276 Feb 296, result of a 50 cent increase

 

2005 May, rumors of H5N1 deaths within China

Apr 205 May 222 June 212, result of a 7 cent increase

 

2006 April, 11 H5N1 deaths within China

Mar 236   April 238 May 251, result of a 15 cent increase

 

2007 March, No New H5N1 cases reported in Vietnam

Feb 425   Mar 374    April 358, result of 67 cent decline in futures

 

Conclusion: it appears as though major events of bird flu, had a positive impact on corn futures prices. It must be noted, initial World Health Organization projections were for 2-7 million people to die from H5N1 bird flu.

As of April 2009, total H5N1 bird flu deaths are 257….Joe Victor    800 551 4626

 

 

Allendale Inc suggest if 2009 corn plantings emulate recent five year history, it is the next four week time frame when as much as 75% of the crop may be planted. As noted in the graphs linked to this article, over the most recent five years, nearly 50% of the corn plantings typically occur at the end of April and first ten days of May.

            However if 2009 corn plantings decide to follow the 2008 pattern, then we are likely to see a one week lag from the traditional planting pace. What is most surprising to view is the rapidness of planting within the two week period of time regardless of the delay or traditional pace.

            The question which may present itself is given the time of year when corn planting is taking place, what influence if any, might it have on corn futures action? Allendale researched as far back as 1996 and discovered some notable results.
            The specific question we asked is what happens to corn futures from the monthly closing price for April, to the closing price for the month of June? Dating back to 1996, 38% of the time, corn futures have risen with 62% of the time futures eroding. The range for those years when prices increased was 1% (1998) to a high of 21% (2008) with an average price increase of 11%. If we were to use a present day (04/21/09 price of $3.83/bushel as an example, price may finish at $3.87 low end range to as high as $4.63 with an average of $4.25 at the close of June.

            Addressing the 62% of the time when prices erode over the May-June timeframe, the smallest decrease was 1% (2006 & 1999) and largest decent of 19% (2004) with an average price decrease of 8.6%. Using the same present day price of $3.83/bushel as an example, price may finish $3.79 to as low as $3.10 with an average of $3.50.

Allendale Inc advises to be extremely alert over the weeks of 4/27 through 5/11 as history has taught us this is when the majority of the corn crop is anticipated to be planted and most likely have the greatest influence on corn prices. Odds suggest a price decline during the time period and most likely to influence both old and new crop prices. Allendale Inc highly recommends to immediately put into action a box option strategy to help manage risk. Call 800 262 7538 to take action for your specific needs. ….Joe Victor

 

 

 

Allendale Inc realizes much of the reason for the rally for U.S. old crop soybean futures is the combination of declining 2009 Argentina soybean production as well as the country’s political problems and stronger than average soybean purchases by China of US soybeans.

            As you are able to view present marketing year net sales of US soybeans to China are running well above its five year average. Most specifically as of the most recent export sales activity report via USDA, China purchases of US soybeans for the 2008/09 market year are the largest of the five main world buyers of US soybeans at 38% greater than year earlier levels. The remaining four largest buyers are all showing smaller purchases than year earlier levels with the EU-25 down 37%, Mexico down 28%, Taiwan down 9% and Japan down 8%.

Most importantly of the total accumulated 2008/09 export sales of US soybeans of 29.098 million tonnes, China accounts for 16.701 million tonnes or 57.4%! The question is will China continue to hang with the US as a supplier of old crop soybeans or direct more of its attention to South America’s new crop harvest?

Allendale Inc is fully aware as of 4/14/09, Rotterdam CIF prices indicate a $2.25 per tonne advantage for Argentina soybeans vs US supplies and $3/tonne discount to Brazil supplies. Allendale Inc suggest if the Argentina discount to US soybeans increases to a level of $8 or more, China may likely switch preferences to Argentina and continue its purchases of Brazil soybeans.

An additional advanced warning of China cooling to US soybeans may be discovered in the May/Nov soybean spread. The recent 40 cent rally in the bull spread may soon discover technical based resistance at $1.10 premium the May futures before old crop futures enter first notice day on 4/30/09. Allendale strongly advises to use a trailing stop on its present bull spread position. A breech of 70 cents premium May vs Nov may be a precursor to the announcement of China increasing South America soybean purchases and there is always may the threat of China canceling previous US purchases or the possibility of China implementing measures to increase the value of its own domestic supply and reduce the imported value as China farmers begin their 2009 spring season planting campaign. The question remains, how much longer could China hang with US suppliers?

Allendale Inc would appreciate your thoughts and ideas regarding the potential for additional US soybean purchases from China. ….Joe Victor

 

 Contact your Allendale broker to discuss Allendale’s “The Evaluator” program. 800-551-4626

 

 

 

 

Allendale is well aware of the recent findings of the USDA “Planting Intention” report and the obvious surprises which were contained within. Those surprises include lower than anticipated soybean planting intentions, larger than usual second quarter soybean use (974 million bu vs three year ave of 891 million bushels) and the thin amount of spring wheat and durum wheat acres projected.

            Herein the question you need to ask yourself, how might these acreage adjustments affect your new crop and old crop risk management? Allendale suggest the 2009 Midwest planted acres are likely to experience an adjustment. Will you adjust before the June planted acreage report or after?

 

Allendale Inc would appreciate your thoughts and ideas regarding the potential for the 2009 acreage adjustments. ….Joe Victor

 

 Contact your Allendale broker to discuss Allendale’s “The Evaluator” program. 800-551-4626