Jul 22, 2014
Home| Tools| Blogs| Discussions| Sign UpLogin


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.
 

Weather Changes Needed to Shift Price Trends

Jul 21, 2014

Good Morning! Paul Georgy with early morning comments for July 21, 2014 at 5:30 am CDT.

Grain futures are lower as weather conditions remain excellent for a potential bumper crop of corn and soybeans. Seasonal heat is on the way this week, but the forecast does not see it staying around very long.

Allendale’s newest long-term weather outlook, grain and livestock price outlooks, and trade strategies will be released this week in our Ag Leaders Conference Series. Sign up to take part.

Update - Morning Coffee Commentary:

Traders and analysts are preparing yield estimates for the August USDA report and they are rising. Many estimates are now above 170 bushels per acre for corn.

Transportation issues in the US are pushing export prices higher and bringing Argentina back into the competitive mix.

Trade is expecting crop conditions to be steady to better this afternoon. That would be counter seasonal as crops begin to mature.

The CFTC Commitment of traders show managed money funds reducing long positions by 14,499 to a net long position of 93,101 in corn. In soybeans they sold 8,310 to leave them net short 6,089 contracts. Funds are now net short 46,495 contracts in wheat.

Negotiations between Argentina’s government and striking workers in the Rosario grains hub were scheduled for Friday but pushed back until today. The major Port of Rosario remains paralyzed.

Ukraine blames Russia for helping destroy airliner crash evidence. More sanctions will be imposed on Russia on Tuesday. The question remains, will Putin buckle or will he provide more support to the separatist?

Beef values are lower with choice down 1.36 and select down 1.59 on Friday. The CME Feeder Index is 214.48.

Cattle traders will have the July Cattle-on-Feed report this week. We are approaching the summer period where beef demand struggles. Futures traders are anticipating this slowdown in demand but cash prices continue to stay firm due to tight supplies.

"There has been a lot of talk in the industry about falling hog weights. It is true weights fell from 215 dressed out in May down to 211 currently. What has not been addressed correctly is that this is a normal seasonal issue. Weights normally bottom from late July through August. In actuality we have done nothing to address the real problem. Weights were 5% over last year a few weeks ago and are 5% over last year right now," says Rich Nelson, Allendale’s Chief Strategist.

Pork cutout values closed out the week up .47.

Allendale’s Ag Leaders Conference "Summer Update" will start tomorrow. Signup now!

Markets as of 5:30 AM CDT          

  • Sep Corn   -5 1/4   
  • Aug Beans   -5 1/4
  • Sep Wheat   -6
  • Aug Cattle  Steady-Lower     
  • Aug Hogs    Steady
  • Sep Dlr     +.00
  • Sep S&P     -2.75
  • Aug Crude   +.02
  • Aug Gold   +5.80

 

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

Heat on the Way for Next Week

Jul 18, 2014

 Heat on the way for next week

 

Good Morning! Paul Georgy with early morning comments for July 18, 2014 at 5:30 am CDT.

Grain futures are mixed with old crop higher on tight supplies. Warmer weather is on the way next week. Some are trying to spin it as bullish other are suggesting it is what the crop needs to reach maturity.

8:00 AM Update - daily Morning Coffee commentary:

Cash corn basis was weaker on Thursday and farmer selling was light around the Midwest. The prices are unattractive for North Dakota producers where basis is 1.20 to 1.30 under September futures.

Ryan Martin, Allendale’s Chief Meteorologist will be giving the first presentation at the Ag Leaders Conference "Summer Update". You also can listen to his daily forecast by clicking here. His morning blog on weather is available as a FREE subscription. Review It today!

All work was at a standstill as multiple strikes paralyzed all grain exports from Argentina's Rosario export hub on Thursday. The Argentine grain inspectors in the agricultural export hub lifted their strike over wages due to a government request. However other unions are still on strike.

Funds bought a net 6,000 wheat contracts, were even in corn, sold 5,000 in soybeans on Thursday.

Argentine Agriculture Ministry says forecasts 2013/14 corn harvest is 33 mmt vs their June estimate of 32.1 mmt. They are looking for the 2013/14 soybean harvest to be 53 mmt vs June estimate of 54 mmt.

(Reuters) - An impasse between U.S.-based Monsanto Co MON.N and soybean buyers in Brazil over royalty payments on a new seed technology may complicate the country's sales of the upcoming oilseed crop.

Microsoft announced it will lay off nearly 18,000 people in the next 6 months. This equates to nearly 15% of its workforce as the new Microsoft CEO is taking the first step to building the right organization.

Pew Research Center says about 23.6% of people age 25 to 34 live with their parents, grandparents or both. That’s up from 18.7% in 2007, just prior to the global financial crisis and from 11% in 1980.

Cow slaughter continues to run 15 to 20% below a year ago levels due to excellent pasture conditions and profitability of cow-calf operation. Feeder cattle prices at record high prices are huge incentive for building cow herds.

Cash cattle traded in TX and CO at 155 and 157.50 respectively. Volume was light with no sales reported in KS. Beef values were mixed with choice down 1.01 and select up 1.38. The CME Feeder Index is 214.11.

Nearby lean hog futures closed below the 20 day moving average for the second time and found support at the 50 day average. A lower close today could accelerate the downward bias. The Pork cutout value is up 1.20.

Allendale’s Ag Leaders Conference "Summer Update" will start on Tuesday. Signup now!

Markets as of 5:30 AM CDT          

  • Sep Corn   -1 1/2   
  • Aug Beans   +4 3/4
  • Sep Wheat   -5 1/4
  • Aug Cattle  -.27    
  • Aug Hogs    -.55
  • Sep Dlr     +.02
  • Sep S&P     +1.00
  • Aug Crude   +.28
  • Aug Gold   -5.50

 

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

Has Corn Made Near-term Lows?

Jul 17, 2014

 Good Morning! Paul Georgy with early morning comments for July 17, 2014 at 5:30 am CDT.

Grain futures are lower in a quiet overnight trading session. Weather conditions and potential record yields for row crops keep pressure on the market while buyers continue to search for reasons for a rally.

cool temperature during pollination study says that we are having the 3rd coolest pollination period since 1980. In those cool years yields set new records. Get all the details at next week’s Allendale's Ag Leaders Update. Contact your Allendale Representative discuss a marketing strategy based on this study. Register for the Ag Leaders Update, here.

7:45 AM Update - Morning Coffeee Commentary:

 

The Weekly Export Sales data will be released today at 7:30 (View Results, Here):

Reuters Survey:

               Trade estimates for      Trade estimates for

                           2013-14                 2014-15:

Wheat                            0          400,000-550,000

Corn               250,000-350,000          350,000-450,000

Soybeans          (-50,000)-75,000          500,000-700,000

Soymeal              20,000-90,000           25,000-150,000

Soyoil                    0-20,000                 0-10,000

After the recent price drop, end users are stepping up to the plate with USDA announcing new sales yesterday. As of July 3rd corn bookings are 28% less than a year ago. Soybean sales are running about 8% behind last year’s pace.

USDA raised its estimate of old crop corn for ethanol by 25 million bushels last week. The USDA’s whole-year goal is now a 9.2% increase over last year. Currently the year-to-date numbers are 9.7% over last year.

Yesterday’s November soybeans close above the pre-report level is being watched as an indicator a near-term bottom is being made.

The Chicago Mercantile Exchange has started a review of electronic trading hours in its cattle and hog contracts, and some think the focus will be on reducing hours to keep the contracts attractive.

The October contract of lean hog futures is in a consolidation phase and a move through recent highs or recent lows could provide a sizeable move in the direction of the breakout. Pork Cutout values are up .71.

Traders have been waiting for some good news to support futures prices. The cash trade at 155 yesterday would be steady with last week and better than expected price. Beef values are mixed with choice up .29 and select down .60. The CME Feeder index is 216.12.

Only a few days until Allendale’s Ag Leaders Conference "Summer Update" begins. The weather session will be presented by Ryan Martin, Allendale’s Meteorologist which takes place July 22nd at 2:00 PM CDT. The series will continue July 23rd and 24th at 2:00 pm with our grain and livestock outlooks. All sessions will be recorded for your viewing convenience.

Markets as of 5:30 AM CDT          

  • Sep Corn   -1 1/4   
  • Aug Beans   -1 3/4
  • Sep Wheat   +0
  • Aug Cattle  +2.05   
  • Aug Hogs    -.02
  • Sep Dlr     -.05
  • Sep S&P     +7.75
  • Aug Crude   +.93
  • Aug Gold   +3.20

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

Bargain Hunters Try Picking a Bottom

Jul 16, 2014

Good Morning! Paul Georgy with early morning comments for July 16, 2014 at 5:30 am CDT.

Grain futures are higher on bargain hunting and short covering. Technical indicators are oversold and an unexpected bounce is possible at any time.

8:00 AM Update - Morning Coffee Commentary:

Allendale’s weather model was run earlier this month and returned a crop yield of 167.8 bpa.

Given the much cooler than normal temperatures this week it will return a higher number when run before next week’s Allendale web conference. The AgLeaders Conference will be run on July 22 – 24. Brought to you on your own computer, signup is now available via our website.

Our North Dakota branch office is reporting that most cash bids for fall delivered corn now has a 2 in front of the price. We are hearing Midwest producers are moving some old crop corn as they are concerned about basis getting wider. Our Minnesota customers are surprised how quickly the corn has caught up and much of the corn is beginning to tassel at a normal time.

The battle between production bulls and those who think it is too early to believe the yield could be near or over 170 is beginning. We will hear a lot more talk from each side before the August USDA report.

Bargain hunters are stepping in and buying corn and soybeans. However it is believed rallies are made to be sold at least until we find a reason for a significant yield loss.

NOPA pegs June soybean crush at 118.7 mil bushel vs. 128.8 million bushel in May and 119.5 million bushel the trade was expecting.

Janet Yellen the Federal Reserve Chairwoman signaled in her semiannual report to Congress on Tuesday, that the U.S. economic recovery is "not yet complete" and too many Americans remain unemployed which makes it necessary to continue with low interest rates.

EIA report expected to show another decline in crude oil inventories.

The EU Leaders will discuss further sanctions against Russia in a meeting today.

As we see the effect of PEDv in the current slaughter mix, we must also point out the seasonality of hog slaughter during the summer. Typically the lowest non-holiday kill week is either the second or third week of June. Slaughter levels then generally stay low through the third week of July. Then numbers begin their build into the heavy November/December peak. This year may be a tougher one to guess due to the effect of PEDv. Pork Cutout values are up .33.

There is talk that some cash cattle may trade at 154 this week $1.00 to $2.00 lower than last week. After seeing august futures sharp decline over the last week only a $2.00 decline could be seen as a victory. Beef values are weaker with choice down .61 and select down .96. The CME Feeder index is 216.77.

Markets as of 5:30 AM CDT          

  • Sep Corn   +5       
  • Aug Beans   +7 1/2
  • Sep Wheat   +3 1/2
  • Aug Cattle  -.15    
  • Aug Hogs    +.02
  • Sep Dlr     +.14
  • Sep S&P     +5.50
  • Aug Crude   +.76
  • Aug Gold   +1.50

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

Corn Crop Improves Last Week

Jul 15, 2014

 Good Morning! Paul Georgy with early morning comments for July 15, 2014 at 4:30 AM.

Grain futures are lower as crop conditions improve for corn and hold steady for soybeans.

Allendale’s Ag Leaders Conference "Summer Update" will start next week. 

Update - Morning Coffee Commentary:

Corn good/excellent ratings increased by 1% last week to 76% while the trade was expecting no improvement. This is the fourth best number for this week in the 28 year ratings history. Corn silking advanced from 15% last week to now 33% with the five year average at 33%.

Soybean ratings were left unchanged at 72% good/excellent. There are only two other years, in the last 28 years with better numbers for this week. Both years resulted in big yields.

Wheat harvest is now ahead of average at 69%. The spring wheat remains at 70% good/excellent. Blooming advanced from 24% complete last week to now 41%.

History suggests we are normally approaching the hottest week of the growing season and our current forecasts are projecting below normal temps for most of the Midwest during this period.

The NOPA Crush for June is estimated at 119.5 which is not a bullish number since the USDA raised it’s total domestic crush estimate on last Fridays report. This number could be looked at as neutral with an attainable slowdown through year end.

Ukrainian wheat is dragging world export prices down as buyers are looking for a discount to offset the domestic unrest risk.

Comments Issued by Darrel Good, University of Illinois…"We have previously argued that the average price for the new era of prices that began in 2006-07 would be about $4.60, so that $2.00 in 2005-06 is equivalent to $3.82 in the current era. An average price in the year ahead near $3.75 would be consistent with similar supply-consumption scenarios of the recent past. It appears that the market has already priced in an average yield of at least 170 bushels."

Last week’s PEDv findings have dropped to 143. Hog slaughter was down over 8% last week and when adding in the heavier weights, pork production was down more than 4%. Are we finally going to see the effects of last winter’s PEDv? July hog contracts go off the board today at noon. Pork cutout values are down .48.

Cattle futures are anticipating the pickup in market ready supplies as showlist increases another 4,000 head on top of the 35,000 increase last week. We also are approaching the time of year where retailers back-off on featuring the primal cuts with only one big cookout holiday weekend left. Beef values were weaker as choice was down .65 and select down .42. The CME Feeder Index is 217.62.

Get our newest price projections and trade strategies, here.

Markets as of 4:30 AM CDT          

  • Sep Corn   -2       
  • Aug Beans   -9 1/2
  • Sep Wheat   – 3/4
  • Aug Cattle  +.20    
  • Aug Hogs    +.30
  • Sep Dlr     +.07
  • Sep S&P     -2.50
  • Aug Crude   -.45
  • Aug Gold   +5.90

 

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

Log In or Sign Up to comment

COMMENTS

Receive the latest news, information and commentary customized for you. Sign up to receive Top Producer's eNewsletter today!

 
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions