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The Allendale Wake-Up Call

RSS By: Paul Georgy,

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.

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

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