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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.

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

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