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June 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.
 

Now We Wait Until 11 O’clock

Jun 28, 2013

Good Morning! Paul Georgy with early morning comments for June 28, 2013  at 5:00 am.  The nearby grain futures are slightly higher with deferred contracts near unchanged. Not much to say about the markets this morning, other than traders are making final adjustments ahead of the many reports which will be released later today. A few observations based on technical picture: the July corn contract is currently near the upper level of the trading range and December corn is trading near the lower side of the recent sideways trading range. The July wheat closed yesterday below the April 1 support level only to rebound overnight. The July soybeans are trading near recent highs and the November is currently 60 cents off the recent highs. Use the technical picture to get an insight on what traders may be thinking about the outcome of the reports.

Trade estimates for June USDA acreage report – RTRS

                             Corn   Soybean   All Wheat   Spring Wheat    Durum     
Average trade estimate      95.313   77.933    55.902        12.132       1.699
USDA 2012 final             97.155   77.198    55.736        12.289       2.123

 

Trade estimates for USDA’s US quarterly grain stocks – RTRS

                             Wheat      Corn      Soybeans
Average trade estimate       0.745      2.845      0.442
USDA June 1 2012             0.743      3.148      0.667

 

Analysts estimates for USDA hogs/pigs report – RTRS

                            Ranges        Average    
All hogs June 1          100.0-101.2        100.5     
Kept for breeding         99.6-100.3        100.0      
Kept for market          100.0-101.3        100.6     
  Weight Groups
   Under 50 lbs.          99.2-101.4        100.5
   50-119 lbs.           100.0-101.6        100.5
   120-179 lbs.          100.4-101.7        100.8
   Over 180 lbs.         100.2-101.0        100.5

 

Boxed beef values were higher yesterday with choice up .87 and select was up 1.11. Futures markets are lower this morning after funds push prices through moving average resistance on Thursday. Cash cattle trade is at a standoff with packer’s bids developing at 117 in the south. Pork prices posted new highs yesterday. It is expected retailers should be finished with their July 4th Holiday purchases. Pork cutout values were down 1.68 on Thursday. Expect some profit taking ahead of the Hog and Pigs Report this afternoon. Rich Nelson, Allendale Inc. Chief Strategist will be providing a USDA Acreage and Stocks Report commentary around 12:00 via YouTube. The Livestock Commentary will have the breakdown of the Hog and Pigs Report.

Markets as of 5:00 AM

  • Jul #Corn    +2 3/4
  • Jul #Beans   +1 1/4
  • Jul #Wheat   +2 3/4
  • Aug #Cattle  -.10
  • Jul #Hogs    +.02
  • Sep Dlr     +.06
  • Sep S&P     +5.50
  • Aug Crude   +.48
  • Aug Gold    -7.60

 

View Today’s 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

Quiet Session In Grain Overnight

Jun 27, 2013

Good Morning! Paul Georgy with early morning comments for June 27, 2013  at 5:00 am. Grains futures are mostly higher in a relatively quiet overnight session. We would expect activity to pick up today during the last full trading session before Friday’s reports. Those who were not able to listen to the June Allendale Ag Leaders Webinar  it is now available on line for your viewing convenience. It is worth your time to listen to the discussion. Traders continue to adjust positions by bull spreading corn and soybeans. Traders are aware that 4 out of the last 5 years December corn futures was limit down 3 times and limit up 1 time after Friday’s report. We have weekly export sales report at 7:30 this morning. Trade average estimates as surveyed by Reuters are:

                 2012/13                2013/14             
                Estimates             Estimates
Corn         100,000-200,000       150,000-250,000
Soybeans        zero-100,000       250,000-450,000  
Soymeal       50,000-100,000          zero-75,000   
Soyoil          zero-10,000             zero            
Wheat            *********         350,000-550,000  
 

Friday is first notice day for CME grain contracts. Corn and Soybean cash premiums are suggesting very few if any deliveries. Traders are concerned there could be wheat deliveries, especially in the KC HRW contracts where low quality wheat could be delivered.  Technically wheat futures closed below a long period of consolidative support. A close below the April 1st low could open the flood gates to the downside. Livestock traders have an important report on Friday in the Quarterly Hogs and Pigs Report. Trade estimates are:

                         Ranges     Average     Mln head
All hogs June 1        100.0-101.2   100.5      66.992
Kept for breeding       99.6-100.3   100.0       5.862
Kept for market        100.0-101.3   100.6      61.162
 

Mexico has halted live hog imports which were only 26,793 last year. Not a major amount when supplies of market ready hogs in the US are tight. Pork cutout values were up 1.45 to 111.33. Speculative buying has been the supportive factor in the cattle complex. There has been no trade in cash cattle this week. Boxed beef was lower with choice down 1.06 and select was up .59. Reports of strong feeder in Oklahoma City supported feeder futures. The CME Feeder Index is 137.26. Look for more pre-report adjusting as we go into Friday "Report Day". Call your Allendale representative to discuss strategy at 800-262-7538.

Markets as of 5:00 AM

  • Jul Corn    + 3/4
  • Jul Beans   +4 3/4
  • Jul Wheat   +5
  • Aug Cattle  +.52
  • Jul Hogs    +.57
  • Sep Dlr     -.02
  • Sep S&P     +3.25
  • Aug Crude   +.25
  • Aug Gold    -.70

 

View Today’s 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

Tight Stocks Worry Traders

Jun 26, 2013

Good Morning! Paul Georgy with early morning comments for June 26, 2013 at 5:00 am.  Grains futures are mixed with corn and wheat higher and soybeans lower. The outside markets are seeing risk–off selling again this morning. Old crop continues to gain on the new crop corn prices as the tight cash market is providing support. The warm weather and plentiful moisture is weighing on the new crop contracts. Trading volume has decreased the last few days as we approach the report Friday morning. When focusing on the quarterly stock data we find it to be high risk when guessing corn usage during the 3rd quarter. Soybean usage seems to have been an easier target for analysts to hit in recent years. Producer clients we talk to on a daily basis seem to have the opinion it doesn’t matter what the USDA says on Friday, the actual acreage will be less. We suggest that the acreage number Friday is not as important as yield this year. The USDA is currently projecting a 2% increase in harvested acres. USDA’s yield estimate is 27% higher than last year. Traders are becoming concerned about late season supplies of corn as ethanol demand will determine price. Weekly ethanol production and stocks will be released later this morning. The quarterly stocks data will determine if more rationing has to take place before new crop supplies arrive. Wheat harvest is moving north and we are hearing good yields and good quality even in KS where USDA said conditions were 45% poor to very poor and 27% fair. Cash cattle sales are at a standstill, as packers in the south are starting this week’s bidding at 117. Most cattle traded at 120 last week. Mexico said on Tuesday it has restricted live pork imports from the United States due to the outbreak of PED in the US. Boxed beef was lower on Tuesday as choice was down 1.68 and select down .66. The feeder index is 137.21. Pork cutout value on Tuesday was 109.88 up .77. Thanks to all attending the Allendale Ag Leaders Webinar last evening. If you have any questions don’t hesitate to call your Allendale Representative.

 Yesterday’s poll asked: How many soybean acres will USDA report on Friday?

No change from March–15.24%
Under 1 million more than March–38.1%
Over 1 million more than March–46.67%

 

Markets as of 5:00 AM

  • Jul #Corn    +4 1/4
  • Jul #Beans   -7 1/4
  • Jul #Wheat   +1
  • Aug #Cattle  +.10
  • Jul #Hogs    -.05
  • Sep Dlr     +.21
  • Sep S&P     +7.50
  • Aug Crude   +.46
  • Aug Gold    -47.50

 

View Today’s 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

Markets Rebound From Sell Off

Jun 25, 2013

Good Morning! Paul Georgy with early morning comments for June 25, 2013  at 4:45 am.  Grains futures are higher on short covering. Outside markets are also providing support. Can turn around Tuesday give us a higher close today? The June Allendale Ag Leaders Webinar is tonight at 8:00. Rich Nelson will discuss the upcoming Planted Acreage and Quarterly Grain Stocks reports in detail. Sign up NOW! Traders are looking forward to the planted acreage report because the discussion on prevent planting and switching from corn to beans will be over. The trade estimate expecting a 2.0 million reduction in corn planted acreage is less than what has been tossed around in recent days. Harvested acres will be the real number to watch as it will be considerably higher than last year for corn no matter what the planted acreage. Please take our one question poll about expected soybean acres below. Soybean supplies will be impacted greatly by yield adjustments as we go through the growing season. The USDA weekly condition report showed corn crop improving by 1% to 65% G/E, compared to last year’s 56%. Producers as of Sunday had 92% of soybeans planted. Soybean conditions also improved to 65% G/E compared to 53% last year. Yesterday, our trip took us from Springfield IL to Highland IL. It was like traveling to another time zone when compared to north of Springfield. Corn and soybeans were very short and under water in many areas after the weekend rains. They have the heat and the moisture but they need sunshine. Wheat harvest is ready to start but fields are too wet. Wheat harvest in OK and KS is in full swing. We are hearing better than expected yields and good test weights. Hog futures continue to rally as the nearby July is trying to stay up with the cash market. Pork cutout value is 1.14 on Monday. Beef cutout values were mixed with choice down .14 and select was up .36.  The feeder cattle index was 136.75 up .13.

Take our one question poll at www.allendale-inc.com
 

Markets as of 4:45 AM

  • Jul #Corn    +6 1/4
  • Jul #Beans   +1
  • Jul #Wheat   +5 3/4
  • Aug #Cattle  +.32
  • Jul #Hogs    +.07
  • Sep Dlr     -.13
  • Sep S&P     +8.50
  • Aug Crude   +.67
  • Aug Gold    +7.10

 

View Today’s 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

Weather and Crop Reports Have Longs On The Run

Jun 24, 2013

Good Morning! Paul Georgy with early morning comments for June 24, 2013  at 5:00 am.  Grains futures are lower due to weekend rains and further pressure in overall commodity prices. The wider than expected coverage of rain across the Midwest with warm temps to follow has traders convinced that "rain makes grain". However, some areas received excessive amounts of rain over the weekend. In Sunday afternoon’s car trip from northern IL to Springfield, IL we saw some excellent looking corn and soybean crops. Traders are looking for conditions to improve on today’s report. The week ahead should see traders preparing for volatility and managing risk. Outside markets will still be dealing with the potential of Fed tapering down the QE program and China’s liquidity crunch. This could have an impact on fund activity. The USDA reports, which will be released on Friday at 11:00, historically have had major consequences. In past years, the Quarterly Grain Stocks and Planting Acreage reports have pushed the markets to limit moves both up and down. The uncertainty will likely have traders adjusting positions to cover some of their risk. Trade average estimates for corn stocks are 2.845 with soybean stocks at 442. Trade average estimate for corn planted is 95.313 million acres while soybeans are seen at 77.933 million acres. Allendale estimate is for 94.364 million acres of corn and 79.240 million acres of soybeans. Managed money funds were net sellers last week as they reduced long positions in corn by 8,112 and inn soybeans by 19,147. They also increased short positions in wheat by 12,734. The US House of Representatives failed to pass the "Farm Bill" and the Senate Finance Committee is calling for a thorough investigation into the Chinese Company buying Smithfield. USDA will release the June Quarterly Hogs and Pigs Report on Friday June 28 at 2 pm. Cattle on Feed report can be called slightly negative. Placements of 98.3% of last year was larger than the 95.0% average guess (Allendale 99.3%). Placements were a little larger than expected, and it must be noted this was compared against a very large May of 2012 number. Marketing’s of 96.6% was smaller than the 97.5% average guess (Allendale 97.5%). Boxed beef values were slightly higher on Friday with choice up .09 and select up .34. The feeder index is 136.62 down .11 on Friday. Pork cutout values were 1.24 to 107.97. Look for a week of position adjusting as traders prepare for reports on Friday. Don’t forget to sign up for the June Allendale Ag Leaders Webinar on Tuesday Evening.

Markets as of 5:00 AM

  • Jul #Corn    -6
  • Jul #Beans   -1 3/4
  • Jul #Wheat   -6
  • Aug #Cattle  Steady-Lower
  • Jul #Hogs    Steady-Higher
  • Sep Dlr     +.28
  • Sep S&P     -11.50
  • Aug Crude   -.16
  • Aug Gold    -8.40

 

View Today’s 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

Farmers Hold Key to Supporting Grain Prices

Jun 21, 2013

Good Morning! Paul Georgy with early morning comments for June 21, 2013  at 5:00 am.  Grains futures are lower as outside markets recover slightly from yesterday’s sell-off. The moving of money is having its impact on grain prices. The hawkish talk by Fed Chairman Bernanke has caused traders around the world to move money out of commodities and away from investments which normally would be a hedge against inflation. The metals markets and stock market received the brunt of the selling on Thursday. The grain complex is retreating from the early week rally as the weather forecast are a little less hot with an increased chance of showers across the Midwest. Farmers hold the wild card to price movement. The uncertainty of harvesting a crop, with last year still very clear in their mind, allows their mindset to be that of a patient seller. However, when the calendar changes to July and corn begins to tassel it will be easier to clean out the bins and price new crop grain. The risk to producers is that you don’t want to be the last man standing when that happens. Basis will deteriorate quickly as well as flat price. The volatility we have seen this past week certainly is evidence of how quickly these markets can change direction. Factors the market is considering as we close out the week are: the Cattle-on Feed this afternoon, the Planted Acreage and Quarterly Stock report next Friday, and the Quarterly Hogs and Pigs Report next Friday afternoon. Managing your risk through this turbulent time is extremely important. Call your Allendale Representative to discuss your alternatives. Sign up for the June Allendale Ag Leaders Webinar scheduled for Tuesday night. Cash cattle trade is slow with a standoff likely until the Cattle-on-Feed report this afternoon. Choice beef was up .32 and select up 1.19. The feeder index was up .18 to 136.73. Chicken has reaped the benefit from high beef and pork prices as retailers and fast food restaurants have featured poultry products. Pork cutout values were down .25 on Thursday. Lean hog futures are overbought technically however futures are under cash hogs by several dollars. Have you signed up for the free midday text from Allendale?

Markets as of 5:00 AM

  • Jul Corn    -6 1/4
  • Jul Beans   – 1/2
  • Jul Wheat   -3 1/4
  • Aug Cattle  -.15
  • Jul Hogs    -.40
  • Sep Dlr     -.12
  • Sep S&P     +12.75
  • Aug Crude   +.56
  • Aug Gold    +9.30

 

View Today’s 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

Ethanol Data Leaves More Head Scratching

Jun 20, 2013

Good Morning! Paul Georgy with early morning comments for June 20, 2013 at 5:00 am.  Grains futures are lower after yesterday’s sharp rally. Traders are concerned about Dr. Bernanke’s comments and a stronger US Dollar. Last week, USDA raised its corn for ethanol estimate from 4.600 to now 4.650 billion bushels. This moves their whole-year estimate to only 7.2% lower than last year. The year to date pace is currently 9.5% lower than last year. To hit the USDA’s new number, ethanol production has to run 4% over last year through August 31 which is only 2.5 months. This scenario makes the Quarterly Grain Stocks report even more important. The weekly export sales data will be released at 7:30. Trade estimates as surveyed by Reuters are:

                                 2012/13                       2013/14            
                               Estimates                    Estimates                       
Corn               50,000-100,000         150,000-250,000     
Soybeans               zero                      350,000-550,000     
Soymeal         50,000-150,000          50,000-100,000      
Soyoil               5,000-15,000                      zero    
Wheat                                                   350,000-550,000 

Informa released their estimates for corn planted acres which was about 2 million acres less the USDA’s March estimate for corn and they expect an increase of nearly 600 million acres of soybeans. July options expire on Friday. Processors have been firming basis as they cover their needs. Fund and technical buying have provided Dec corn price with a 45 cents trading range while November soybeans have had a range of 37 cents this week. Funds were estimated buying a net 18,000 contracts of corn, 7,000 soybeans and 6,000 wheat on Wednesday. The rally in Argentina wheat due to reduced planting is helping support US wheat futures. Livestock traders are positioning for the Cattle on Feed report and cold storage report on Friday after the close. The trade estimates can be found on the USDA Report Data page in the Allendale Advisory Report. The USDA will release the Quarterly Hogs and Pigs Report a week from Friday at 2 PM. Lean hog futures are leading the livestock rally by posting a 2 year high on Wednesday. Pork cutout values are down .45. Boxed beef values were mixed with choice down 1.26 and select up .30. Cash cattle bids are starting to develop in the south at 116 compared to last week’s 120 trade. The discount of futures to cash in lean hogs is helping support futures. Sign up for the free Allendale Ag Leaders Webinar on Tuesday evening.

Markets as of 5:00 AM

  • Jul #Corn    -6 1/2
  • Jul #Beans   -8 3/4
  • Jul #Wheat   -11 1/4
  • Aug #Cattle  -.27
  • Jul #Hogs    +07
  • Sep Dlr     +.55
  • Sep S&P     -15.75
  • Jul Crude   2.10
  • Aug Gold    -82.70

 

View Today’s 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

Three Factors Directing Grain Prices

Jun 19, 2013

Good Morning! Paul Georgy with early morning comments for June 19, 2013 at 5:00 am.  Grains futures are mostly lower on profit taking after yesterday’s rally. The weather market seems to winding down as current forecasts should be considered as positive to the production and bearish for price. However a forecast for extreme high temps for the Midwest would change trader sentiment in a hurry. The next several trading sessions will be dominated by talk of planted acreage shifts between corn and soybeans, quarterly stocks data estimates and technical support/resistance points. A much more in-depth discussion on these issues can be found in the Allendale Advisory Report. We are continually asked about the July contracts and their impact on new crop values. The trade treats the old crop and new crop contracts as 2 different animals. However farmer selling can impact both contracts when they sweep their bins clean or when they price this year’s harvest. There have been reports of some farmer selling in old crop corn on the recent rally as the positive basis makes cash prices enticing. We were hearing soybean basis up as much as 20 cents and corn up 8 cents in some locations late yesterday. Traders continue to struggle with how the USDA will handle the seemingly aggressive demand for soybeans for domestic use and export deliveries. Listen to the Allendale Ag Leaders Webinar on Tuesday evening when Rich Nelson will shed light on the issue. The USDA will release the June Cattle on Feed Report on Friday afternoon at 2 P.M. Allendale’s estimates for this report are: On Feed 97.1, Placed 99 and Marketed 97.5% when compared to a year ago. Cold storage data is likely to show a drawdown of pork and an increase of beef in storage. Boxed beef values were mixed on Tuesday with choice down .95 and select up .36. Pork cutout values were up 2.61. The CME feeder cattle index settled at 136.45.

Markets as of 5:00 AM

  • Jul #Corn    -5
  • Jul #Beans   + 1/2
  • Jul #Wheat   – 1/4
  • Aug #Cattle  +.27
  • Jul #Hogs    +1.02
  • Sep Dlr     +.05
  • Sep S&P     +3.00
  • Jul Crude   +.47
  • Aug Gold    +.60

 

View Today’s 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

Soybeans Crush Data Concerns Trade about Ending Stocks

Jun 18, 2013

Good Morning! Paul Georgy with early morning comments for June 18, 2013 at 4:50 am.  Grains futures are higher this morning in a quiet overnight session. June, July and August soybean crush must be down 19% to make USDA’s numbers work on the last S+D balance sheet. In other terms, that means 1 out every 5 processing plants must be closed completely during this period. Trade will have to deal with the question, can we import enough soybeans to meet crushing needs? The late planting of soybeans could also create a hole in supply during late Aug and Sep. Planting progress was in line with trade estimates at 85% complete as of Sunday. Soybean conditions are starting the season at 64% which was a little better than what trade was expecting. Corn conditions improved 1% to 64% good to excellent. The June 28 Planted Acreage and Quarterly Stocks Reports will create positioning volatility over the next 9 days. July corn is expected to trade independent of the new crop contracts. Farmers are strong holders and will not clean out their bins until they see corn tasseling. Weather forecasts are being watched closely as traders remember last summer’s rally starting on June 18. Boxed beef was higher on Monday with choice up 1.66 and select up .24. Cash cattle markets were quiet. The feeder index was up .18 to 136.32.  Futures found support due to short covering and buy stops. The July hog futures are now at a sizable discount to the cash price. Pork cutout values were up .50 on Monday. Technically, lean futures are overbought and live cattle futures are oversold. Stay in touch with your Allendale Broker and remember to sign up for the June Allendale Ag Leaders Webinar.

Yesterday’s poll asked, "What price will Dec corn hit first?"

$4.50 – 67.4%

$6.50 – 32.6%

Thank you for your participation!

Markets as of 4:50 AM

  • Jul #Corn    +2
  • Jul #Beans   +2 1/4
  • Jul #Wheat   +5 1/4
  • Aug #Cattle  -.22
  • Jul #Hogs    +.17
  • Sep Dlr     -.10
  • Sep S&P     +5.75
  • Jul Crude   -.18
  • Aug Gold    -6.00

 

View Today’s 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

Tight supplies push July futures

Jun 17, 2013

Good Morning! Paul Georgy with early morning comments for June 17, 2013  at 5:00 am. Grains futures are mostly lower except for the July corn contract. Later today we will be getting 2 very important reports. At 11AM, NOPA will release their May data. Trade average estimate is for crush to be 118.1 million bushel which would be 15% below the same period a year ago. Even with this type of reduction, Sept through May is 2.7% above year ago levels. With adjustments on the June S+D, they changed their projection to 2.7% lower crush for the year. Tight farmer holding of soybeans is making for a very interesting old crop market for soybeans and corn. Basis closed out the week on a firmer note. The trade will also be watching planting progress for soybeans this afternoon where the expectation is for 87 to 90% completion. There will be no more planting data for corn. However trade is expecting an improvement of 1 to 3 % in the G/E category. The weather forecast has the next system moving across the Midwest starting Wednesday through Friday. Traders are now looking at "rain makes grain" as bearish. Funds, last week, reduced long corn positions by 8431 contracts and increased long positions by 12,258 contracts. We expect volatility to continue in the old crop/new crop spreads. Boxed beef was lower on Friday with choice down 1.10 and select down .58. Cash cattle closed out the week trading mostly 2.00 lower at 120.00. The feeder cattle index was up .14 to 136.14. The June lean hog futures went off the board at 102.30 which is over 4.00 higher than the July contract. Pork cutout was 3.31 on Friday. Allendale Ag Leaders Webinar will be held on June 25.

What level will corn prices hit first? Take our one question poll

 

Markets as of 5:00 AM

  • Jul #Corn    +1 3/4
  • Jul #Beans   -7 1/4
  • Jul #Wheat   -1 1/2
  • Aug #Cattle  Steady-Lower
  • Jul #Hogs    Steady-Higher
  • Sep Dlr     +.04
  • Sep S&P     +15.00
  • Jul Crude   +.75
  • Aug Gold    -2.10

 

View Today’s 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

Old Crop Demand Leads Charge

Jun 14, 2013

Good Morning! Paul Georgy with early morning comments for June 14, 2013 at 5:00 am.  Grains futures are higher with spreading as the main feature. Old crop futures are leading the rally in corn and soybeans. Export sales were a non-event yesterday as rumors of Chinese cancellations were circulating through the trade but we still don’t have a confirmation yet. The weather forecast has lighter amounts of rain all the way through the 15 day period. We were getting reports from MN and ND late yesterday that planters were running where light rain had occurred. Another MN producer said he thought he saw Noah looking at a couple of his cows for the Ark. Goldman lowered price projections for corn and soybeans and recommended a short position in new crop corn and soybeans in their basket of trades. Argentina Farmers are due to stop moving grain on Saturday through Wednesday as a way of protesting economic policy. Some exporters are becoming concerned about keeping the pipeline full. Cash corn basis at Midwest processors and exporters is stronger. Japan bought 157,000 mt food grade wheat from the US and other origins in their weekly tender. South Korea bought 60,000 mt of corn from South America and another 50,000 mt from optional origin. Lower cash cattle bids are weighing on futures although there has been no confirmation of active movement. Choice beef was down 1.16 and select was up .06. There were no deliveries against the June Live Cattle contract. Cash hogs remain strong which is providing support to the nearby futures. The IA-MN hog value reached a level not seen since August of 2011. The June contract goes off the board this afternoon. Pork values are driven by tight hog supplies and retail demand. Next week will be very import as there are several economic reports and the release of the FOMC meeting minutes. Will the Fed send a signal of change in current policy?

Markets as of 5:00 AM

  • Jul Corn    +4 1/2
  • Jul Beans   +8 3/4
  • Jul Wheat   -2 3/4
  • Aug Cattle  -.22
  • Jul Hogs    -.10
  • Sep Dlr     +.15
  • Sep S&P     +4.00
  • Jul Crude   +.25
  • Aug Gold    +.70

 

View Today’s Chart of the Day

If you have any questions on any of our material, give us a call at 800-262-7538.

Contact Allendale:

Email: service@allendale-inc.com

New Bullish News Needed To Drive Fund Buying

Jun 13, 2013

Good Morning! Paul Georgy with early morning comments for June 13, 2013 at 5:00 am.  Grains futures are mostly lower. Some weather models are now forecasting less rain in the 6 to 10 day period. Funds are looking for a new catalyst to provide incentive for them to reestablish long positions. The USDA did not change many numbers on yesterday’s supply and demand report. The 2012/2013 crush number was increased by 25 million bushels. They increased soybean imports by 5 million bushels and lowered exports by 20 million while keeping ending stocks the same as last month at 125 million bushels. The USDA made no change in 2013/14 soybean acreage and yield which was in line with Allendale’s research. Corn acreage was kept the same as the March 31st intentions report but the USDA lowered yield to 156.5 from 158 bushels per acre. Trader focus now switches to the Planted Acreage report for corn and soybeans on June 28. We will also get quarterly stocks report on the same day. The USDA raised wheat production mostly in the HRW but lowered ending stocks due to an increase in wheat exports. Argentine farmers go on strike Saturday through Wednesday but the event is not expected to effect crush and export. The Dec corn and July Minneapolis wheat closed below the 50 day moving average on Wednesday. At 7:30, USDA will release the weekly export sales data. The following estimates (thousand metric tonnes) have been collected by Reuters. 

                               2012/13                       2013/14        
                              Estimates                    Estimates                   
Wheat                      zero                      400,000-600,000   
Corn             100,000-200,000              150,000-250,000
Soybeans                 zero                      450,000-600,000    
Soymeal         75,000-150,000                50,000-150,000     
Soyoil             10,000-20,000                          zero  

There have been no cattle deliveries against the June futures contract with oldest date August 3, 2012. Packer’s bids are developing in the south at 120. Packer margins are in the black which could provide underlying support. Boxed beef values were mixed with choice down 1.20 and select up .15. The feeder cattle index is 135.83, down .05. Pork futures continue to set new contract highs as packers are aggressive buyers of cash hogs. Retailers are buying ahead for the July 4th holiday. Pork cutout values were up 1.96. Today’s economic reports include the jobless report, business inventories, and retail sales. Make sure you get in on the special pricing for the Allendale Advisory Report before it ends on Friday. Subscribe today!

Markets as of 5:00 AM

  • Jul Corn    +1 3/4
  • Jul Beans   -6 1/4
  • Jul Wheat   – 1/4
  • Aug Cattle  +.37
  • Jul Hogs    +.30
  • Sep Dlr     -.17
  • Sep S&P     -7.00
  • Jul Crude   -.29
  • Aug Gold    -7.00

 

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Countdown to USDA Report at 11:00AM CDT

Jun 12, 2013

 

Good Morning! Paul Georgy with early morning comments for June 12, 2013 at 5:00 am.  Grains futures are mixed in a quiet overnight session. Grain markets are in a back and fill mode ahead of the USDA Supply and Demand report which will be released at 11:00 am central time. Traders are not expecting much adjustment in old crop stocks however the focus is on the new crop corn ending stock. Will the USDA make an adjustment for late planting and potential prevent planting? History suggests they will likely make a small adjustment if any on this report. They will likely wait until the results of the Planted Acreage report at the end of the month are tallied. Recent USDA actions, however, have surprised the trade.

Reuters Poll:                                 Ending Stocks                           Ending Stocks
                                                        2012/13                                       2013/14          
                                             Wheat    Corn    Soybeans          Wheat   Corn   Soybeans
Average trade estimate         0.733   0.759     0.121               0.640     1.795     0.268 
Highest trade estimate           0.751   0.919     0.140               0.713     2.200     0.344
Lowest trade estimate            0.715   0.684     0.080               0.501     1.175     0.185
USDA May                               0.731   0.759     0.125               0.670     2.004     0.265

 

Farmers in Argentina will suspend grain sales starting Saturday through Wednesday to protest economic policies.

There were no deliveries of cattle against the June futures contract on Tuesday. Cattle futures rebound on short covering and found support from lean hogs setting a 2 year high. Retailers are aggressive buyers for the July 4th holiday featuring. Hog futures are overbought and a corrective sell-off could occur at any time. Boxed beef was mixed on Tuesday with choice down .19 and select up .72. The feeder index is 135.88 up .30. Cash hogs are higher with pork cutout values up another 1.38. Make sure you get in on the special pricing of the Allendale Advisory Report it ends soon. Subscribe today!

Markets as of 5:00 AM

  • Jul #Corn    +1
  • Jul #Beans   +6 3/4
  • Jul #Wheat   -4 1/2
  • Aug #Cattle  +.60
  • Jul #Hogs    +.85
  • Sep Dlr     +.10
  • Sep S&P     +7.00
  • Jul Crude   -.03
  • Aug Gold    -1.30

 

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Corn Planting Increases To 95% Complete

Jun 11, 2013

Good Morning! Paul Georgy with early morning comments for June 11, 2013 at 4:40 am.  Grains futures are higher on short covering ahead of tomorrow’s Supply and Demand report. USDA put corn planting progress at 95% which was higher than trade estimates. The states of IA, MO, ND and WI are well behind normal and rain continues to inundate these areas. Producers are struggling with their options. There will be corn planted in some areas as livestock producers need feed. Overall, corn conditions improved by 2% in the G/E category. Soybean planting progress improved by 14% to 71% complete. Soybean traders are expecting more acres will shift from corn to soybeans. However, before we get the actual planted acreage numbers on June 28, the USDA will release monthly supply and demand estimates on Wednesday morning at 11:00 am. Our research suggests the USDA typically does not change the planted acreage or yield for corn or soybeans on the June S+D Report.  Farmers in Argentina are expected to go on strike today. The Ukrainian Ag Minister says they are expected to increase grain exports this marketing year. Chinese markets are on holiday until Wednesday. Bull spreads are being supported on tight cash grain supplies. There were no cattle deliveries against the June Live Cattle contract. The oldest date was August 3, 2012. Boxed beef values rebounded on Monday with choice up 1.59 and select up .07. Hog markets have gone parabolic on technical and fund buying. The purchase of Smithfield by a Chinese company has traders expecting big things when it comes to pork exports. We suggest proceeding with caution at these levels. Thanks for participating in the survey on Monday Wake-Up-Call. See the results below.

Where would you be a seller of November soybean futures?

At current price level…approx $13.25–37.09%
Wait until $14.50–48.34%
Wait until $15.50–14.57%

 

Markets as of 4:40 AM

  • Jul #Corn    +3 1/4
  • Jul #Beans   +8 1/2
  • Jul #Wheat   -2 1/4
  • Aug #Cattle  +.10
  • Jul #Hogs    +.97
  • Sep Dlr     -.17
  • Sep S&P     -11.50
  • Jul Crude   -.37
  • Aug Gold    -18.10

 

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Weekend Rains Less Than Expected

Jun 10, 2013

Good Morning! Paul Georgy with early morning comments for June 10, 2013 at 5:00 am.  Grains futures are lower. The weekend rains were lighter and provided more open time to plant in many areas. The longer term forecast is a little warmer which is now beneficial for the growing crops. Trade estimates for today’s planting progress report are 93 to 95% of the corn planted and around 73% of the soybeans planted. Talking to some producers over the weekend, they believe we could see more progress than expected just because of the extra time to get fieldwork done before the rain moved in. Corn crop conditions are expected to improve on this afternoon’s report. Spreads will likely get attention this week ahead of the USDA Supply and Demand report on Wednesday at 11:00 am. The July futures gained 16 cents on the Dec corn last week and the July/Nov soybean spread gained 37 cents. Economic data out of China over the weekend showed unexpected weakness in their May trade and domestic activity. Analysts are now concerned that China may not hit the 7.5 GDP growth. First notice day for June Cattle is today. Cash markets were inactive last week. On the product side, boxed beef values slipped. On Friday, choice beef was down 2.06 and select was down 1.47. The feeder index was 133.84 up .44. Tight market-ready hog supplies are supporting pork cutout values as they rose by 1.57 on Friday. Please fill out the survey question on our website. We will give the results tomorrow morning.

Markets as of 5:00 AM

  • Jul #Corn    -5 1/2
  • Jul #Beans   -8 1/4
  • Jul #Wheat   – 4 1/4
  • Aug #Cattle  Steady-Lower
  • Jul #Hogs    Steady-Higher
  • Sep Dlr     +.17
  • Sep S&P     +6.50
  • Jul Crude   -.38
  • Aug Gold    -4.50

 

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Planting in 2013 Not An Easy Chore

Jun 07, 2013

Good Morning! Paul Georgy with early morning comments for June 7, 2013 at 5:00 am.  Grains futures are mixed in a quiet session ahead of economic data release. Planting the balance of the corn and soybean crop will not be ideal. The forecast is for open weather for a few more days before another system moves in to the Midwest. However the wet areas will need more than 2 days to ready fields for planting. Bull spreads are the feature at the CME as the touted Goldman and UBS rolls start today. Tight cash supplies of corn and soybeans should support nearby contracts. If there were any surprises on yesterday’s export sales data it came in the new crop corn where only 52 tmt sold last week.  Old Crop soymeal sales were at higher end of trade expectations which leads to concerns the USDA is understating soybean crush. Rich Nelson has said "the USDA has to raise their crush number on the balance sheet or we need to close more than 23% of processing plants for the balance of marketing year." Tight old crop supplies of both corn and beans will have an impact on nearby futures as we move into July and August. Traders are now thinking the US may have to import beans to meet balance sheet expectations. CONAB the reporting service for the Brazilian government said on Thursday that Brazil’s corn production is 78.5 mmt which 2.5 mmt more than what USDA had in last report. The Mississippi River is expected to re-open to some barge traffic today. Allendale estimates for next Wednesday’s Supply and Demand Report is outlined in the chart below.

US ENDING STOCKS                            USDA      ALDL      USDA      ALDL
in million bushels                            12/13      12/13    13/14     13/14
                          US Corn                   759        769         2004      1680
                          US Beans                 125        124           266        296
                          US Wheat                 731        734          670        686

 

Check below for the results of yesterday’s Planting Intention Question. New highs for the uptrend were reached on Thursday. Those attending the World Pork Expo got an update on the PED progression through the US. While the problem is not getting much worse, it appears we must get used to the idea that this will remain with us for the summer. Pork cutout values were down .28. Cash cattle action was quiet so far this week as the industry waits for the employment numbers. This is especially important in the beef world where consumers have had to re-orient themselves to the idea that higher prices are a "deal". Boxed beef was mixed as choice was down .77 and select was up .28. The feeder index was 133.45 on Thursday.

In Thursday’s poll, we asked, What is your strategy in regards to Prevent Plant? Here are your thoughts:

Take Prevent Plant Option–54.62%
Continue Planting Corn–28.57%
Switch to Soybeans–16.81%

 

Markets as of 5:00 AM

  • Jul #Corn    – 3/4
  • Jul #Beans   +5
  • Jul #Wheat   +1 1/4
  • Aug #Cattle  -.17    
  • Jul #Hogs    -.02
  • Sep Dlr     -.13
  • Sep S&P     +0
  • Jul Crude   +.40
  • Aug Gold    -5.00

 

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Planting Weather Market Nears End

Jun 06, 2013

Good Morning! Paul Georgy with early morning comments for June 6, 2013 at 5:05 am.  Grains futures are lower. Spreading remains the dominant volume in the grain complex as rumors fuel the July contracts. New crop is influenced by weather forecasts and planting progress.  Traders are trying to figure out if rain is bullish or bearish. We are hearing a lot of "rain makes grain" talk with the possibility of 95% of corn being planted by Sunday. Soybeans traders are taking profits from last week’s sharp rally and drier forecasts. Corn basis in central IL was down 10 cents yesterday afternoon while soybean processors in Indiana raised bids. The demand for meal has traders expecting soybean stocks to shrink to unprecedented levels. Meal exports sales will be watched closely on the report later this morning. US soybean crush continues to run at a pace well above USDA forecasts. Ethanol production released yesterday was 2% below same week a year ago however for the year we are running 9.8% below last year. The USDA is forecasting an 8.2% year over year decline. USDA Crop Production and Supply & Demand reports will be released next Wednesday.  Two large index funds are expected to be rolling out of the July contract starting on Friday for a total of 5 sessions. Weekly Export sales report will be released at 7:30 this morning.

Trade estimates for USDA weekly grain/soy export sales – RTRS

                            2012/13                          2013/14          
                           Estimates                      Estimates                        
Wheat                   zero                      400,000-600,000    
Corn            100,000-200,000       500,000-700,000
Soybeans              zero                      350,000-600,000     
Soymeal        50,000-150,000                 zero-50,000                                 
Soyoil              25,000-45,000                      zero         

Weakness in the Equities has livestock bulls a bit nervous. The Unemployment data due to be released Friday morning is likely to have an impact on livestock futures. Cash bids are developing in the 121 to 122 area while feedlots are looking for 124 to 125. Boxed beef was mixed with choice down .89 and select up .47 on Wednesday. The feeder index was up .08 to 132.95. Pork cutout values were down .54. We ask that website visitors take the time to answer the question below and hit submit. The results of the survey will be releases in tomorrow morning’s Wake-up-Call.

 

Markets as of 5:05 AM

  • Jul #Corn    -4
  • Jul #Beans   -8
  • Jul #Wheat   -2
  • Aug #Cattle  +.20    
  • Jul #Hogs    +.62
  • Sep Dlr     -.16
  • Sep S&P     +5.75
  • Jul Crude   +.49
  • Aug Gold    +2.00

 

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Debate on Weather Still Drives Markets

Jun 05, 2013

Good Morning! Paul Georgy with early morning comments for June 5, 2013 at 5:05 am. Grains futures are mixed this morning with July futures firm while new crop contracts are lower. Traders continue to debate the weather forecast and that will continue to happen until 95% of corn and beans are planted. The tight cash supplies of old crop corn and beans keep the spreads very active and volatile. Two major funds will begin rolling positions out of the July contracts starting Friday which is expected to run for 5 days. The USDA Crop Production Report will be released next Wednesday. The debate on actual planted acres will flare up as we get closer to  the June 28th Planted Acreage Report (which many think is the biggest report of the year). The European Commission has reduced their wheat production by 1.8 mmt however total production will exceed last year’s by 4.1 mmt. Early wheat yields out of TX and OK have a very wide range (6 to 35 bushel per acre). Brazil exported a record 7.95 mmt of soybeans in May. Corn basis was firmer in the eastern Corn Belt but weaker along the Mississippi river mostly due to river closings. Cash hogs remain firm as supplies are tight. Pork cutout values were up .71 on Tuesday. Boxed beef slipped as choice was down .88 and select was down 1.35. Packers are expected to bid 121 to 122 this week in the South. The feeder index was down .27 to 132.87. Friday’s monthly employment report will be watched closely. Keep in mind, the May report showed a good rebound in employment. That could lead a few bulls to suggest this market has enough downside priced in. More details can be found in the Allendale Advisory Report.

Markets as of 5:05 AM

  • Jul #Corn    +1 3/4
  • Jul #Beans   + 1/2
  • Jul #Wheat   + 1/2
  • Aug #Cattle  -.37    
  • Jul #Hogs    +.25
  • Sep Dlr     -.02
  • Sep S&P     -5.25
  • Jul Crude   +.38
  • Aug Gold    +.50

 

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Soybean Complex Sees Profit Taking

Jun 04, 2013

Good Morning! Paul Georgy with early morning comments for June 4, 2013 at 4:50 am.  Traders are taking some profits led by the soy complex this morning. We have three factors affecting the soybeans which are weather, technicals and tight old crop supplies. The weather forecasts have more rain moving west to east midweek and then again over the weekend. Delays in planting beans are not extremely critical for new crop production but create the concern about filling the demand for beans early this fall. Corn saw profit taking yesterday. However, when the funds get through rolling positions out of July, the tight cash supplies should again provide support. The USDA said the US farmer has 91% of corn planted and only 57% of soybeans and 80% of spring wheat planted as of Sunday. The technical picture signaled a big reversal day yesterday in corn futures. Soybeans are overbought but closed above key chart points. Trade the soy complex with caution. Cash bean basis was stronger in central IL while softer along the river. The Mississippi is closed to navigation from northern IA to St Louis due to high water. Russian wheat crop size is improving due to recent rains. The GMO wheat jitters continue while USDA investigates the origin of the problem. There has been more talk of corn acres switching to beans. Rich Nelson looked into the probability of that happening and found late planting does not impact planting switches as much as revenue per acre. Funds sold a net 10,000 corn contracts and bought 1,000 wheat and 7,000 soybean contracts on Monday. Hog slaughter was limited to 402,000 head after accounting for the transportation problem with Tyson’s Columbus Junction plant. That would theoretically back up some hogs. Not only are we approaching the tightest supply portion of the year, on top of that the numbers are not hitting the trade’s expectation for this time. On the demand side, we wonder if the cool temps next week will have an impact. Pork cutout values were up .74. Boxed beef was lower again on Monday with choice down .48 and select down 1.76. The feeder index was up 2.33 to 133.14. Listen to the Allendale’s weekly broker meeting by clicking here.

Markets as of 4:50 AM

  • Jul #Corn    -1 3/4
  • Jul #Beans   -9
  • Jul #Wheat   6 3/4
  • Jun #Cattle  -.12    
  • Jun #Hogs    +.25
  • Jun Dlr     +.11
  • Jun S&P     -1.25
  • Jul Crude   -.50
  • Jun Gold    -10.00

 

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Heavy Rains Support Beans

Jun 03, 2013

Good Morning! Paul Georgy with early morning comments for June 3, 2013 at 5:10 am.  Soybeans lead the rally at the CME. Weekend rains will delay planting of soybeans and the forecast is also supportive to start the week. I made a trip to southern IL over the weekend where they had a total of 6 to 8 inches of rain out of 2 rain events that moved across the area in less than 24 hrs. There was a lot of flooding Saturday morning and by Sunday afternoon much of the water had receded and the corn looked surprisingly good. Southwest IL had most of their corn planted but very few soybeans. Much of the Midwest will be out of the field for several more days and even without any additional rain. Weather forecasts will be watched closely this week by soybean traders. This afternoon traders are looking for only a slight increase in planting progress last week in both corn and soybeans. Spreads between old crop and new crop will create volume this week as several major funds will be rolling out of the July contract. Managed Money increased long positions in corn by 43,928 contracts last week. They increased net long positions in soybeans by 21,465 contracts and decreased short positions in wheat by 4,280 contracts. Despite larger supplies of market ready cattle last week and lower wholesale beef prices, cash cattle was able to hold steady at $124. Boxed beef was lower on Friday with choice down 1.90 and select down 1.89. The beef industry needs some seasonal cookout weather in the metropolitan areas to help retail clearance. The Feeder Index was down .86 to 130.81 on Friday. Since the start of May we have seen hog slaughter run 0.4% below last year. This is almost 3% lower than what the March Hogs and Pigs report would have implied for this time period. Pork cutout value was down .72 to close out the week. Contact your Allendale Representative for more details or subscribe today to the Allendale Advisory Center.

Markets as of 5:10 AM

  • Jul Corn    +5
  • Jul Beans   +22
  • Jul Wheat   +5 1/2
  • Jun Cattle  Steady-Lower     
  • Jun Hogs    Steady-Higher
  • Jun Dlr     -.30
  • Jun S&P     +3.50
  • Jul Crude   +.09
  • Jun Gold    +3.20

 

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