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January 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.
 

Weather Market Versus Demand

Jan 31, 2013

Good Morning! Paul Georgy with early morning comments for January 31, 2013 at 5:00 am. Grain futures are lower on profit taking ahead of the export sales data at 7:30. A weather market is in full swing caused by varying forecasts for #Argentina and #Brazil. Some traders are more excited about too much rain in Brazil where bean harvest is being delayed. Others are focusing in on the drying in Argentina where #beans could be hurt more than corn. Markets at the CME will be very sensitive to weather forecasts for a few more weeks. Technical buying kicked in yesterday after the soybeans and corn took out recent resistance levels. Support now crosses at old resistance which is 7.35 in March corn and 14.60 in March soybeans. Demand slows for corn as weekly EIA ethanol production drops 22,000 barrels per day to 770,000 last week. That equates to an 18% drop from same period last year. The year to date average is 11.4% below last year and the USDA is projecting a 10% decline. Traders will be watching the export sales numbers out later this morning for some hope that we can hit the lowered demand expectations. USDA weekly export sales estimates are: #corn 150 to 300 tmt, #soybeans 650 to 850 tmt, soymeal 150 to 200 tmt, soyoil 15 to 25 tmt and wheat 350 to 550 tmt. Mississippi River traffic is still snarled at Vicksburg. Late yesterday, it was estimated that over 1,000 barges were waiting to pass through the area. Funds bought an estimated 10,000 corn contracts, 4,000 wheat, and10,000 soybeans contracts. Cattle Inventory Report will be released on Friday at 2:00 pm (CST). Trade is expecting a reduction of nearly 2% in total inventory due to last year’s drought. This is a 60 year low in inventories. Russia confirmed they will ban US beef and pork starting Feb. 11. Boxed beef was lower with choice down .13 and select down .08. Weather conditions are hampering hog movement which is support for nearby futures. Pork cutout values were down 1.12 on Wednesday. I will be on the road doing several meetings in February, details can be found at http://www.allendale-inc.com/upcoming-events. Hope to see you in our travels.
Markets as of 5:00 AM
  • Mar Corn    - 1/2
  • Mar Beans   -9 1/2
  • Mar Wheat   -2
  • Feb Cattle  +.32
  • Feb Hogs    -.02
  • Mar Dlr     +.03
  • Mar S&P     -1.50
  • Mar Crude   -.30
  • Feb Gold    -5.80
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Risk-On Buyers Support Grain Futures

Jan 30, 2013

Good Morning! Paul Georgy with early morning comments for January 30, 2013 at 5:10 am. Grain futures are higher. The soy complex is leading prices higher as it notches new highs for the recent move. Grain markets are waiting for a catalyst to cause a breakout of the range bound price discovery. Could it be the release of the US GDP data later this morning or will it be the announcement of the minutes of the FOMC meeting? On Friday morning we have the Labor Dept. releasing employment data. #Weather in #Argentina and #Brazil is still very much a concern to grain traders. Crops there are thirsting for moisture with the temps in the upper 90’s to low 100’s the next few days with chance of rain this weekend. The large Brazilian bean crop harvest is causing logistical problems with the heavy rains in some areas. Mississippi River problems are causing a slowdown in movement of #soybeans to the gulf. Demand is the key to US #corn prices as producers keep the bin doors locked. We will get the USDA Weekly Export data tomorrow. Algeria bought 500-600 tmt durum wheat mostly from US and Canadian origin. The CME is considering shortening trading hours in grains after the comment survey they started last week. CME also is looking into stopping trading around a major USDA report. The ICE exchange says it will not change current trading hours as reported by Reuters. Most traders and feedlots are expecting cash cattle to trade higher this week. The futures have set back on profit taking after the reaction to Friday’s smaller than estimated cattle-on-feed numbers. Boxed beef values were lower on Tuesday with choice beef down .72 and select down 1.32. Packers may call first of month contracted cattle to fill needs as profit margins remain in the red. Hog traders are wrestling with the tight cash hog supplies and competitive meats at the retail counter. Pork cutout values were up .95. The feeder cattle index stands at 145.13 up .57.
 
Markets as of 5:10 AM
  • Mar Corn    +4 1/2
  • Mar Beans   +16 1/2
  • Mar Wheat   +2
  • Feb Cattle  +.05
  • Feb Hogs    -.07
  • Mar Dlr     -.20
  • Mar S&P     -.25
  • Mar Crude   +.30
  • Feb Gold    +4.20
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Argentina Weather Remains in the Spotlight

Jan 29, 2013

Good Morning! Paul Georgy with early morning comments for January 29, 2013 at 4:45 am. Grain futures are mixed on light overnight volume. #Corn prices have found a trading range between 7.12 and 7.35. Traders are satisfied with these prices as volume is light and the uncertainty of South American weather remains a focus. The GFS and the Euro weather models are not in agreement on temps and when rain might arrive in production areas of Argentina. The more consistent Euro Model has pushed the rain off into next week. There are some areas in Brazil that could get heavy rains. Traders have commented that overall the rain will benefit more than it will harm. The week ahead has several important economic reports that could sway traders thinking. On Wednesday we have the 4th quarter GDP in the morning and the FOMC meeting in the afternoon and then Friday we have the unemployment report. Export inspections were higher than last week for corn and slightly lower for #soybeans. The barge crashing into a bridge at Vicksburg has a been big delay in barge traffic already and the Mississippi is not expected to open until Thursday. #Cattle futures recover from oversold conditions on Monday due to a friendly Cattle-on-Feed report. We are expecting cash cattle to trade higher this week. However product is not showing much of sign that demand is getting better. Boxed beef was up yesterday. Choice was up .17 and select was up .56. Lean hog futures have been the follower of late. Tight cash #hog supplies and a firm tone to product provides support. Pork cutout values were up .52 on Monday.
 
Markets as of 4:45 AM
  • Mar Corn    +2
  • Mar Beans   -2 1/2
  • Mar Wheat   +1 1/4
  • Feb Cattle  -.35
  • Feb Hogs    -.27
  • Mar Dlr     +.01
  • Mar S&P     -2.75
  • Mar Crude   -.01
  • Feb Gold    +6.80
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Grains Gain To Start Week

Jan 28, 2013

Good Morning! Paul Georgy with early morning comments for January 28, 2013 at 5:10 am. Grain futures are higher in narrow trading ranges overnight. In the next few weeks we will likely see a tug-o-war between the supply side traders and the demand side traders. South American weather and tight US supplies of corn and soybeans will provide the support to the market and the poor exports for corn and the poor ethanol demand will provide the negative bias. More rain has been added to the Argentina growing region for this week with more moisture in the 6 to 15 day period. POET, the second largest ethanol producer said Friday it was closing its Macon, MO plant due to corn availability. We have a mid-February USDA Supply and Demand report but everyone is already taking about the USDA Outlook Conference at the end of February. Producers will be watching the average prices for new crop corn and soybeans during February as the crop insurance prices are set. The CFTC Commitment of Traders Report had managed money increasing long positions in corn by 9,658 and in soybeans by 18,358. They increased their short positions in wheat by 2,990. The Cattle-on-Feed report showed the high feed costs and poor profit margins are influencing cattle producers. The On-Feed number at 94% was less than the average trade estimate of 95.5%, Placements were down 1% when trade was looking for about a 4% increase and marketing’s at 98% was much better than the 93.1% trade estimate. This number should support the oversold cattle complex on today’s opening. Beef cutout values were lower on Friday with choice down .57 and select down .33. The feeder index was up .81 to 145.17. Pork cutout values were up .41 on Friday. Producers from all across the country attended the Allendale Ag Leaders Conference last Friday and Saturday. The speakers were energizing and factual. Call your Allendale Representative to get the Allendale price projections for 2013.
 
Markets as of 5:10 AM
  • Mar Corn    +4 1/4
  • Mar Beans   +5 3/4
  • Mar Wheat   +3 1/2
  • Feb Cattle  Steady-Higher
  • Feb Hogs    Steady-Higher
  • Mar Dlr     +.06
  • Mar S&P     +.50
  • Mar Crude   -.12
  • Feb Gold    -3.70
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Quiet Trade Ahead of Export Data

Jan 25, 2013

Good Morning! Paul Georgy with early morning comments for January 25, 2013 at 5:20 am. Grain futures are slightly lower in a quiet overnight session. South American weather is keeping traders nervous as Argentina temps rise and rain is sparse. Forecasts for .1 to .5 inches next week will be welcome but may not be enough to stop crop production loss. As weather models vary on rainfall, markets continue to be choppy. Traders are very concerned about demand as weekly export sales will be released this morning. The ethanol data yesterday was better than last week but not good enough to reach USDA’s corn usage target. The production number was 15% below last year. Ethanol imports jump by 40,000 gallons per day from the previous week. Estimates for the weekly sales export report are: corn 200 to 450 tmt, soybeans 750 to 950 tmt, soymeal 200 to 300 tmt, soyoil 10 to 30 tmt and wheat 350 to 550 tmt. Farmer selling of corn is nil as barge freight on the Mississippi River has fallen to levels not seen since August. The lack of demand for empty barges is cited for lower rates. Funds bought 5,000 corn contracts, sold 2,000 wheat and were estimated as even on soybeans. Allendale's Ag Leaders Conference starts at 12:00 noon today. I hope to provide some of the highlights Monday morning. Cattle on Feed report will be released this afternoon. Trade estimates are for On-Feed 95.6% of a year ago, Placements at 104.1% and Dec Marketing’s at 93.2% of last year. Cash cattle traded at 123 in NE which was 1.00 higher than earlier in the week. Boxed beef values fall again. Choice was down 1.77 and select down .71 on Thursday. Cash hog strength provides boost to hog futures. Pork cutout was down 38. The feeder cattle index dropped 3.79 to 144.36.

Markets as of 5:20 AM

  • Mar Corn    -1
  • Mar Beans   -2 3/4
  • Mar Wheat   -2 1/2
  • Feb Cattle  +.62
  • Feb Hogs    -.15
  • Mar Dlr     -.18
  • Mar S&P     +3.00
  • Mar Crude   +.46
  • Feb Gold    -2.50

 

Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Lack Of News Turns Focus Back To Demand

Jan 24, 2013

Good Morning! Paul Georgy with early morning comments for January 24, 2013 at 5:00 am. Grain futures are lower on profit taking and demand worries. Traders struggle to find new bullish news to drive markets higher. The weather in Argentina is not ideal for increasing crop production over the entire growing area. However forecasts now have 50% of the growing area getting rain with a few short spells of heat flare-ups. Ethanol production will be out this morning and export sales are pushed back until tomorrow due to the holiday. Traders are concerned about demand for corn ahead of these reports. There is more talk of China buying US beans for immediate delivery due to their positive crush margins. Funds sold an estimated 9,000 contracts of corn on Wednesday. They also sold 3,000 wheat contracts and 6,000 soybean contracts. The University of Illinois Ag Econ Department released an update to their profitability projection for 2013 which showed corn more profitable than soybeans on highly productive land. CME is taking comments on the extended trading hours they implemented last May. Flat price comparisons of corn to soft red wheat in the southern plains has feeders looking at using wheat for feed. Those attending Allendale’s conference this weekend will get the facts and outlooks for corn, beans, wheat and livestock. They will take home strategies for 2013. Cash cattle traded at 122 which are 2 to 3 dollars lower than last week. Cattle futures came under pressure when talk circulated that Russia was considering banning US beef and Pork. Technical indicators show oversold in cattle and feeders. Feeder Cattle Index was down 2.72 to 145.43. Boxed beef was lower with choice down .81 and select down 1.00. Pork cutout values were up .22.
 
Markets as of 5:00 AM
  • Mar Corn    -4
  • Mar Beans   -13
  • Mar Wheat   -2 3/4
  • Feb Cattle  -.15
  • Feb Hogs    +.42
  • Mar Dlr     +.12
  • Mar S&P     -3.00
  • Mar Crude   +.27
  • Feb Gold    -9.00
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Traders Eye Ridging in Argentina Weather Pattern

Jan 23, 2013

Good Morning! Paul Georgy with early morning comments for January 23, 2013 at 5:00 am. Grain futures are higher in a narrow trading range. Southern hemisphere weather is what traders are talking about. The various models are projecting similar forecasts with little moisture for Argentina and a high pressure ridge moving across the growing region. Temps could reach the low 100s but will last only a few days. Best chance of rain is late next week. Further deterioration of corn crop in Argentina could be very supportive to old crop corn in the US. Price relationships between new crop corn and new crop soybeans lean toward planting more acres of corn. This should be supportive to bull spreading in corn. However the export demand side of the equation is still very bleak. Export inspections yesterday were only 11.0 million bushel. The wheat markets came under pressure yesterday as spreaders were buying beans and selling wheat. Ukraine’s Ag Minister said that 91.5% of their winter crops are in good to satisfactory condition. Moisture for the southern plains seems to be just on the horizon but never arrives. February option expiration is Friday. Allendale Ag Leaders Conference is Friday. We have a great line up of speakers with ideas you will be able to take home and put into action. Livestock futures are oversold on technical indicators. The volatility in livestock futures are expected to continue this week as the Cattle on Feed report will be released on Friday at 2:00 pm. Boxed beef was firmer on Tuesday. Choice was up .75 and select was up 1.29. Weather is expected to become more seasonal later this week and hog markets should cleanup. Pork Cutout value was up 1.23. Stay tuned to Allendale Research for updates on market movers.
 
Markets as of 5:00 AM
  • Mar Corn    +1 1/4
  • Mar Beans   +3 1/4
  • Mar Wheat   +1 3/4
  • Feb Cattle  -.20
  • Feb Hogs    -.30
  • Mar Dlr     -.17
  • Mar S&P     -1.75
  • Mar Crude   +.68
  • Feb Gold    -1.20
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

South American Weather Concerns

Jan 22, 2013

Good Morning! Paul Georgy with early morning comments for January 22, 2013 at 5:00 am. Grain futures are higher in a quiet session overnight. The inauguration and the MLK holiday is now over and the government will have to get down to business as the debt ceiling is near. Grain traders will be keeping one eye on politics but focused on South American weather. Argentina received a little less rain than was forecast this weekend. Not much is expected in the 10 day forecast with temps staying relatively cool with a few days of flare-up. We will likely begin to see some reduction in production out of Argentina if this weather pattern continues. Export sale are likely not going to reach USDA’s latest target unless demand changes soon. Lack of farmer selling is keeping basis strong and we are hearing more talk of ethanol plants slowing production. There likely will be more plant closing announcements very soon. The CFTC report showed funds back buying corn last week as they increased longs by 26,736 contracts. They also increased longs in soybeans by 6,184 contracts. Open interest has increased sharply in grains since the USDA report. Last week’s sharp rally has technical indicators showing overbought conditions. Look for more volatility this week. Cattle futures fell on liquidation and news of Cargill closing a TX plant. Cattle and feeder cattle contracts at CME are oversold technically. The weakness in cattle is weighing on lean hog futures. We suggest caution in picking a bottom in livestock, use proper risk protection. Boxed beef was sharply lower on Friday. Choice was down 2.36 and select was down 1.75. Pork cutout value was down .25. Allendale’s 25th Ag Leaders Conference is Friday and Saturday, tickets are still available.
 
Markets as of 5:00 AM
  • Mar Corn    +6 1/4
  • Mar Beans   +17 1/4
  • Mar Wheat   +6 1/2
  • Feb Cattle  Steady-Lower
  • Feb Hogs    Steady-Lower
  • Mar Dlr     -.25
  • Mar S&P     +1.75
  • Jan Crude   -.02
  • Feb Gold    +5.30
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Grains Show Consolidation Pattern

Jan 18, 2013

Good Morning! Paul Georgy with early morning comments for January 18, 2013 at 5:10 am. Grain futures are higher, taking back yesterday’s loses. Export sales for soybeans last week were the largest for this marketing year. The trade has been talking about crush margins improving in China; this could be the reason for buying beans for quick delivery. The USDA announced another 240,000 tonnes of new crop beans sold this week. Corn exports were better than expected but when the bar is set low it is easier to get over. The sell-off was on light volume yesterday. Funds sold 7,000 corn, 2,000 wheat and 5,000 soybeans contracts. A Brazilian consulting firm raises their soybean production to 84.0 mmt. It seems like a quest of who can get the highest believable production number. Weather forecasters have added a little more rain across the mid-section of the growing region in Argentina. Later today, Informa will update their acreage projections. Poor margins are causing the closing of the ethanol plants in York and Ravenna NE. We are hearing there are more plants across the cornbelt considering the same option as the losses mount. Markets will be closed on Sunday night and Monday. They will reopen at 7:00 pm on Monday evening. High grain prices and drought are impacting the livestock industry. Cargill announced yesterday it will close the Plainview, TX beef processing plant on Feb 1 due to tight cattle supplies. Boxed beef values were lower on Thursday. Choice was down 1.63 and select was down 1.84. Cattle futures are due for rebound as technical indicators are oversold. Hogs futures gain on firm cash news as extremely cold weather approaches next week. Pork cutout values were down .37. Allendale will be releasing price outlooks for 2013 at next week’s Ag Leaders Conference, sign up today!
 
Markets as of 5:10 AM
  • Mar Corn    +4 3/4
  • Mar Beans   +4 3/4
  • Mar Wheat   +3 1/2
  • Feb Cattle  -.35
  • Feb Hogs    +.15
  • Mar Dlr     +.13
  • Mar S&P     +.75
  • Jan Crude   -.10
  • Feb Gold    -.40
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Quiet Trade Gives Way to Profit Taking

Jan 17, 2013

Good Morning! Paul Georgy with early morning comments for January 17, 2013 at 5:10 am. Grain futures are lower on profit taking. A South Korean buyer passes on a wheat tender saying prices were too high. Demand for corn has not been in line with USDA usage numbers. The EIA ethanol production was the lowest we've seen this year. Compared to last year production was 17% less and USDA’s target is 10% less than the 2011/12 marketing year. Processors have pushed bids in the Midwest as gulf bids slip due to seasonal demand slowdown and open navigation on the Mississippi. USDA’s weekly export sales will be released at 7:30 this morning. Estimates are: corn 150 to 250 tmt, soybeans 750 to 950 tmt, soymeal 100 to 150 tmt, soyoil 15 to 25 tmt and wheat 450 to 650 tmt. Corn sales are likely to be low as the price of US corn is still $28 to $30 higher than South America. Soybean traders have been talking this week that China has purchased 30 cargoes of US beans since the USDA report last Friday. We have no confirmation of these sales yet. US wheat was competitive in the world trade until the recent sharp rally. Funds were light volume players yesterday as they are estimated to have bought 5,000 corn, 8,000 soybeans and 1,000 wheat contracts. Cash cattle traded in the southern Plains yesterday at the 124 to 125 range compared to last week's 125 to 128. This weaker trade caused futures traders to give up longs and push prices into technical sell points. Higher corn price adds fuel to liquidation attitude. Choice beef was up .37 and select was up 1.28. Pork cutout values were up .49 on Wednesday. Allendale will be releasing price outlooks for 2013 at next week’s Ag Leaders Conference, sign up today!
 
Markets as of 5:10 AM
  • Mar Corn    -1 3/4
  • Mar Beans   -4
  • Mar Wheat   -3 3/4
  • Feb Cattle  -.42
  • Feb Hogs    +.12
  • Mar Dlr     -.11
  • Mar S&P     +.25
  • Jan Crude   +.23
  • Feb Gold    -.90
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Corn Higher Eight Days In a Row

Jan 16, 2013

 

Good Morning! Paul Georgy with early morning comments for January 16, 2013 at 5:10 am.
 
Grain futures in Chicago are higher led by strength in China and Europe. Money flow into agricultural commodities seems to be one reason for this positive move in prices. Traders have been looking ahead to what the March 1st stocks might look like in corn and soybeans.
 
We talked about corn briefly yesterday morning however the focus is what we should be watching over the next few months. Ethanol production will be very important. Can we get to within 10% of last year’s production? The weekly EIA data will be released later this morning. Export inspections will become more important as we move sold grain out of the country. Livestock production will likely have the largest impact as the feed and residual category on the USDA balance sheet for corn has a great deal of variance.
 
SA soybean production continues to grow. Several crop watchers are moving Brazil production up to 81 mmt. The weather forecast for Argentina is dry for the next 10 days which is drawing attention and support for both grain and soybean prices. The lack of moisture in the forecast for the southern plains and the anticipation of wheat filling the short falls in corn supply are supportive to wheat.
 
Technical buying and money flowing into the grain and soybean complex relieved the oversold condition going into last week’s report. We remind you that the trend in still down with critical resistance and moving averages just above recent highs. We also recommend getting some protection on new crop corn.
 
Call your Allendale Rep to design an option strategy for your needs. Cash cattle bids are developing at 123 in the south which compares to the 125 trade last week. Choice beef was down .63 and select was up .16. Cash hogs are expected to be firmer which is providing support to futures. Pork cutout values up .34 on Tuesday. Allendale’s Ag Leaders Conference is on January 25 and 26, 2013. Hope to see you there!
 
Markets as of 5:10 AM
  • Mar Corn    +3 3/4
  • Mar Beans   +10 1/4
  • Mar Wheat   +4 3/4
  • Feb Cattle  -.32
  • Feb Hogs    -.15
  • Mar Dlr     -.16
  • Mar S&P     -1.00
  • Jan Crude   +.31
  • Feb Gold    -4.80
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

 

Gains Lead to Profit Taking

Jan 15, 2013

Good Morning! Paul Georgy with early morning comments for January 15, 2013 at 4:50 am. Grain futures are mixed on profit taking after Monday’s gain. With corn ending stocks now below Oct 2012 estimates, China back buying US soybeans and soybean crush running well above what is needed to meet USDA projections, what more do you need to fuel the rally in grains. After further analysis, Allendale’s Rich Nelson says "Be careful about getting too excited about these bullish looking numbers". In years where we have an early harvest, the first quarter use is large but the March number usually leads to adjustments. Export demand has to pick up quickly in order for us to meet the new numbers from USDA. Export sales now have to only reach 85% of last year’s level instead of 90%. There is hope however as the Mississippi River is navigable again which should lessen barge freight rates and make US grain more competitive at the gulf. Further weakness in the US dollar could also create buyer interest however US grains are still higher priced than the rest of the world. Weather conditions are drying out in Argentina. Traders will begin to be concerned about the rains shutting off and it turning dry after their early season rains. Celeres has raised their estimate for Brazil’s soybean production to 80.43 mmt from last month’s estimate of 79.02 mmt .Funds were huge buyers yesterday, buying 15,000 soybean contracts, 11,000 corn contracts and 6,000 wheat contracts. Agriculture Secretary, Tom Vilsack will stay on for Obama’s second term. USDA expects a decline in beef production in 2013 by 4.3% and has pushed most of that decline in production to the 4th quarter of 2013 where they are now expecting a 9% decline from last year. Boxed beef is mixed with choice down .15 and select up 1.27. Cash cattle are still waiting for bids to develop. Hog weights are lower and packer margins improved on seasonal buying. Futures bounced off of oversold condition. Pork cutout was down .48 on Monday. Allendale’s Ag Leaders Conference is on January 25 and 26, 2013. Hope to see you there!
 
Markets as of 4:50 AM
  • Mar Corn    - 1/4
  • Mar Beans   -7 1/4
  • Mar Wheat   +4 3/4
  • Feb Cattle  -.32
  • Feb Hogs    -.15
  • Mar Dlr     +.04
  • Mar S&P     -2.25
  • Jan Crude   +.01
  • Feb Gold    +11.80
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Grains Trade Higher Overnight

Jan 14, 2013

Good Morning! Paul Georgy with early morning comments for January 14, 2013 at 5:00 am. Grain futures are higher on follow-through from USDA data. Traders needed more time to work through the numbers from Friday's USDA Supply and Demand Report. The corn number was friendly with ending stocks in the low 600s and stocks to use at 5.3%. The USDA did lower demand in exports and ethanol, however, they raised demand in the feed and residual category. This will leave room for adjustments on the upcoming report. Soybeans and wheat have to be looked at as friendly as well. The increase in production in soybeans was offset by demand. NOPA Crush data is out later this morning and trade is expecting some big numbers for December. January soybean futures stop trading at noon today. US wheat is the cheapest in the world and we should begin to see some improvement in demand. The larger than expected soft red winter wheat plantings could keep pressure on the new crop Chicago contracts. Mississippi River navigation south of St Louis is open to barges with a 9 ft. draft. The Corp has completed rock removal and recent rains have increased water level. Barge freight basis has gone down, improving chance for export interest. Demand is still very important and we expect that higher prices will not be the answer. Managed money funds continued to reduce long positions in corn by 20,000 and soybeans by almost 29,000.  Market direction could be determined by whether the funds continue to liquidate. Livestock futures came under pressure after the USDA report. Higher feed cost is not what livestock producers are looking forward to. Boxed beef was mixed on Friday with choice up .43 and select down .47. Cash hogs were lower late last week as holiday hogs supplies hit the market. Pork cutout values were up .43.
 
Markets as of 5:00 AM
  • Mar Corn    +14 1/4
  • Mar Beans   +17 1/2
  • Mar Wheat   +15 3/4
  • Feb Cattle  Steady-Lower
  • Feb Hogs    Steady- Lower
  • Mar Dlr     -.05
  • Mar S&P     +1.50
  • Jan Crude   +.61
  • Feb Gold    +7.80
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Relax, the Report is Out at 11:00 AM CST

Jan 11, 2013

Good Morning! Paul Georgy with early morning comments for January 11, 2013 at 5:00 am. Grain futures are mixed. Corn and soybeans are lower with wheat higher. Trading volume has been very light overnight. Traders are making last minute adjustments ahead of the USDA report at 11:00 am this morning. It seems as if traders are looking for a friendly report for corn as we have rallied about 18 cents this week. The expectation is to see a sizeable drop in harvested acres for corn. Allendale is looking for a smaller production number but expecting a reduction in demand to offset production drop. Soybean numbers should not see much change. However as Rich Nelson, Allendale’s Chief Strategist says about the January Report "expect the unexpected". Check in to www.allendale-inc.com after the report and we will have a recap for you. Cash cattle traded 2.00 lower on Thursday in TX. Boxed beef was higher with choice up .26 and select up .43. Pork cutout values were up .49. Livestock futures will be impacted by the grain report later this morning. Key chart support is at 131.20 in Feb cattle and 84.17 in Feb hogs. A reminder for those attending the Allendale Ag Leaders Conference to please make sure you have reserved your hotel room and getting the Allendale discount.
 
Markets as of 5:00 AM
  • Mar Corn    -2 1/2
  • Mar Beans   -13 1/4
  • Mar Wheat   +1
  • Feb Cattle  -.42
  • Feb Hogs    +.12
  • Mar Dlr     +.07
  • Mar S&P     -.50
  • Jan Crude   -.49
  • Feb Gold    -9.30
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Markets Waiting For USDA Report

Jan 10, 2013

Good Morning! Paul Georgy with early morning comments for January 10, 2013 at 5:10 am. Grain futures are mostly higher overnight. South Korea rejected offers on their tender to buy corn siting prices were too high. We will be getting weekly export sales data this morning at 7:30. Trade estimates for the sales are: corn 100 to 200 tmt, soybeans 200 to 400 tmt, soymeal 75 to 175 tmt, soyoil 35 to 65 tmt and wheat 325 to 425 tmt. Egypt put out a tender for an unspecified amount of wheat from optional origin. Wheat prices at the US gulf have slipped enough to become competitive. USDA is expecting the crop insurance pay-out on 2012 crops to be $10.69 billion. That total is just slightly less than the record pay-out of $10.84 in 2011. It appears the work being done on the Mississippi River near Thebes, IL should be completed by the end of this week giving barges an additional 2 foot draft. The US Ag Department declared a major portion of the HRW area a natural disaster area yesterday. As of yesterday's close, March corn had rallied 14 cents in 3 sessions which relieves the technical oversold condition. Traders seem to be prepared for anything the USDA may deliver on Friday at 11:00 am. March soybeans have relieved some of the oversold condition however the 13.55 area is key support. Kansas feedlots are still holding out for 130 for cash cattle. Futures met some selling by funds when key moving averages were broken. Product has not performed like most thought it would to start the year. Boxed beef was mixed on Wednesday with choice down .43 and select up .22. Pork futures touched limit down on liquidation and larger live hog supplies. Pork cutout was down .07. Those of you coming to the Allendale Ag Leaders Conference on Jan 25 and 26, make sure you have reserved your hotel room and are getting the Allendale discount.
 
Markets as of 5:10 AM
  • Mar Corn    +3 1/4
  • Mar Beans   + 1/2
  • Mar Wheat   +5 1/2
  • Feb Cattle  +.10
  • Feb Hogs    +.17
  • Mar Dlr     -.16
  • Mar S&P     +3.75
  • Jan Crude   +1.29
  • Feb Gold    +6.80
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Technicals Indicate Oversold Conditions in Grains

Jan 09, 2013

Good Morning! Paul Georgy with early morning comments for January 9, 2013 at 5:10 am. Grain futures are mixed in light volume trade overnight. Traders are focused on 3 factors going into the USDA report on Friday at 11:00 am CST. The re-balancing by index funds, weather in South America and technical support and resistance is getting traders' attention as they adjust positions ahead of report. The grain markets were very active on the close yesterday and it is anticipated they will be the same today. South American weather is favorable to crop production however some models have more rain moving into Brazil which could slowdown harvest progress. This could provide incentive for China to buy beans from the  US. CONAB should give us an update on production estimates later today. Yesterday’s sell-off from intraday highs has traders wondering if the downtrend is still intact. Watch the 6.75 area in March corn and the 13.55 area in the March soybeans. A close below these levels would likely activate more selling. Grain futures are still showing oversold which could be enough of a reason for a further recovery before Friday’s report. South Korea bought corn, wheat and soymeal from what appears to be South American origin. A few cash cattle traded at 128 in the south and 2.05 dressed in the north on Tuesday. Cutout values were higher on Tuesday. Choice was up .49 and select up .71. Pork cutout values were down .63. Cash hog index for IA-MN was down sharply yesterday. I will be giving a Pre-USDA Report outlook at the Northern IL Farm Show at 10:00 am. Look forward to seeing you there.
 
Markets as of 5:10 AM
  • Mar Corn    -1 1/2
  • Jan Beans   -4 1/2
  • Mar Wheat   +1
  • Feb Cattle  +.10
  • Feb Hogs    -.50
  • Mar Dlr     +.10
  • Mar S&P     +.50
  • Jan Crude   -.12
  • Feb Gold    -.50
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Countdown to January USDA

Jan 08, 2013

Good Morning! Paul Georgy with early morning comments for January 8, 2013 at 4:45 am. Grain futures are mixed on position evening. The USDA report on Friday has many different facets to consider. The 2012 final yield will be set by the USDA. They will also adjust harvested acres and may adjust planted acres which will impact total production for 2012. The demand side of the balance sheet is also of significant importance as they will likely lower export demand and ethanol demand. Feed and residual use is the wild card as we see it. Quarterly stocks for corn, beans and wheat plus planted acres for winter wheat could also be a market mover. South American production estimates for corn and soybeans will have a lasting impact on 2012 prices. When taking into account all the changes, you have to conclude the report will likely have something for both the bulls and the bears. Many traders are looking for this report to be over so the market can trade the real issues: demand, new crop prospects and fund interest in rebuilding long positions.  Fund rebalancing starts today on the close and will conclude in 5 days. Analysts are expecting index funds to buy 50,000 soymeal, 20,000 KC wheat while selling 60,000 Chicago wheat, 35,000 beans and 10,000 corn contracts on or near the close over this period. Weather conditions in South America remain favorable. We see the potential for further short covering going into Friday’s 12:00 noon Eastern Time report release. However negative chart signals may provide resistance to rally. Livestock futures are struggling with index fund rebalancing and the Goldman Roll. Cash cattle trade is still waiting to develop. Boxed beef was mixed on Monday. Choice was down .77 and select was up .38. Cash hogs are starting the week lower as supplies are plentiful after last week’s cold weather hampered movement. Pork cutout was up .22. If you are in the DeKalb, IL area tomorrow, I will be giving a Pre-USDA Report outlook at the Northern IL Farm Show at 10:00 am. Look forward to seeing you there.
Markets as of 4:45 AM
  • Mar Corn    + 1/2
  • Jan Beans   -5 3/4
  • Mar Wheat   +2
  • Feb Cattle  -.17
  • Feb Hogs    +.42
  • Mar Dlr     -.07
  • Mar S&P     -1.25
  • Jan Crude   +.24
  • Feb Gold    +7.30
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Grains Oversold with Big Report on Horizon

Jan 07, 2013

Good Morning! Paul Georgy with early morning comments for January 7, 2013 at 5:10 am. Grain futures are higher on short covering. The week ahead should be an interesting week. The USDA report on Friday has the potential to impact corn and soybean prices for at least 3 months. Traders are waiting for final production numbers and demand adjustments made by USDA. Weather conditions in South America would have to be viewed as a bit negative as the forecast looks for temps to be cooler than expected last week. The dryness in Brazil is limited to less than 10% of growing area. Farmers are not selling cash grain on this weakness as corn basis firmed on Friday at Central Illinois processors. Currently the grain futures are oversold with markets closing under pressure on Friday. Key chart support to watch today is 6.75 in March Corn and 13.56 in March soybeans. A close below those levels would likely trigger more selling. The Allendale Ag Leaders 2013 Outlook Conference is January 25 and 26th.  Sign-Up Today! Cattle traders will be waiting for an end to the standoff in the cash markets. We have a full processing week ahead. Boxed beef closed the week lower. Choice was down .65 and select was down 1.06. Pork cutout values were up .36 on Friday. Futures opening will be taking their cue from outside markets at 9:05. If you are in the DeKalb, IL area Wednesday I will be giving a Pre-USDA Report outlook at the Northern IL Farm Show at 10:00 am. Look forward to seeing you there.

Markets as of 5:10 AM

  • Mar Corn    +4 1/4
  • Jan Beans   +7 1/2
  • Mar Wheat   +4
  • Feb Cattle  Steady
  • Feb Hogs    Steady
  • Mar Dlr     +.07
  • Mar S&P     -1.25
  • Jan Crude   -.29
  • Feb Gold    +6.20

 

Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

Lots to Watch Today

Jan 04, 2013

Good Morning! Paul Georgy with early morning comments for January 4, 2013 at 5:10 am. Grain futures are mixed in early trade. We have a lot to digest this morning with export sales at 7:30, EIA data at 10:00 and an update on production numbers from Informa sometime during the session. The weekly export sales estimates are: corn 200 to 300 tmt, wheat 350 to 550 tmt, soybeans 250 to 450 tmt, soymeal 100 to 250 tmt and soyoil 10 to 30 tmt. The cancellation of 315,000 tonnes of soybeans by China yesterday has traders concerned if there is more cancellations to come. Brazil’s harvest is getting started which should be in full swing by late January. The USDA attaché has bumped up his forecast for Brazilian bean crop to 83.0 mmt. The Buenos Aires Grain Exchange says that Argentina’s soybean plantings are equal to last year at 85% complete. And corn plantings are at 82% complete only 1.5% behind last year. Weather forecast for Argentina is conducive to getting the balance planted. The BA exchange put wheat harvest at 79% which is 15% behind last year. Index Fund rebalancing begins next week and it is expected they have to sell about 20,000 contracts of corn. We have to view the rebalancing as "market noise". The real focus will be the USDA final production numbers for 2012 and their supply and demand estimates. This report will be released next Friday at 11:00 AM. Those of you looking for marketing advice go to www.allendale-inc.com and click on the "Call to Action" button. We have put out some recommendations to subscribers. Mississippi River levels could fall to restricted levels by next week. However the Army Corp of Engineers expect to have rock pinnacles cleared by them giving an additional 2 feet of draft. March corn futures have technical support at 6.83 ½. A close below that level sets the stage for a move to 6.50. Livestock traders widened the spread between cash and futures on Thursday. Boxed beef values were higher with choice up .97 and select up .66. Cash cattle trade has bids at 125 and asking prices at 130. We are expecting product values to strengthen due to recent slowdown in slaughter level. Cash hogs are firm as packers bid for next week’s needs. Pork cutout values were up 1.71 on Thursday. If you are in the DeKalb, IL area next Wednesday I will be giving a pre-USDA Report outlook at the Northern IL Farm Show at 10:00 am. Look forward to seeing you there.
 
Markets as of 5:10 AM
  • Mar Corn    -2
  • Jan Beans   +3 1/4
  • Mar Wheat   -1
  • Feb Cattle  +.07
  • Feb Hogs    +.025
  • Mar Dlr     +.43
  • Mar S&P     +.50
  • Jan Crude   -1.19
  • Feb Gold    -44.30

Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

More Liquidation Overnight in Grains

Jan 03, 2013

Happy New Year and Good Morning! Paul Georgy with early morning comments for January 3, 2013 at 5:10 am. Grain futures are lower on continued liquidation. The market was surprised yesterday by the heavy selling pressure in most grain contracts. One of the major reasons was the unwinding of spreads in the soy complex. Congress re-instating the $1.00 biodiesel credits and making it retroactive to Jan 1, 2012 caused huge liquidation of long meal/short oil spreads. This in turn pressured soybean values. Funds sold an estimated net 4,000 soymeal and bought 6,000 soyoil. Funds sold 8,000 corn contracts, sold 6,000 wheat contracts and sold 5,000 soybeans. Nearby corn futures are finding supported in the gap left from July 5, 2012 on the March chart. The gap would be filled at 6.83 ½ basis the March contract. Index fund rebalancing is due to start next Tuesday. The fear of a poor crop in South America is subsiding as Argentina is expected to be dry for the next 10 days. Brazil bean crop is progressing and many are expecting harvest to start in 2 weeks. Some are expecting 2.0 mmt to be exported by end of January. US weekly export data will be released on Friday morning at 7:30. Traders will be getting positioned for the USDA report next Friday, Jan 11. This report is likely to have an impact on prices for the first quarter of 2013. Allendale's 25th Annual Outlook Conference will be held on January 25th and 26th. Tickets are still available. Call today to reserve your seat. Livestock futures are finding support from outside markets. Cold weather has slowed movement of live hogs in the  upper Midwest. Pork cutout value was down 1.00 on Wednesday. Cash hogs should find support as packers prepare for next week’s business. Boxed beef was mixed with choice down .21 and select up 1.57. We expect to see further gains in beef product as retailers restock coolers after the holidays.

Markets as of 5:10 AM

  • Mar Corn    -5 1/2
  • Jan Beans   -16 3/4
  • Mar Wheat   -2 1/4
  • Feb Cattle  +.125
  • Feb Hogs    +.025
  • Mar Dlr     +.29
  • Mar S&P     -3.50
  • Jan Crude   -.51
  • Feb Gold    -7.00
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