March 1, 2015

Will Fundamentals Overcome Strike Fears?

February 27th, 2015

Good Morning! It’s Friday February 27th at 5:30 AM.

Grains markets are higher as trade mulls first notice day deliveries, end of month positioning, lack of resolution to the trucker strike in Brazil, and economic data slated for release later today.

Our nationwide producer acreage survey continues through next Friday. Thanks to all who have already participated, and if you have a moment, let us know your acreage numbers, here.

First notice day for March contracts is today. Overnight there were 1,416 deliveries in corn (all were stopped), 284 soybean oil, and 79 KC Wheat.

Yesterday morning’s export sales were mostly within trade estimates and uneventful, instead all eyes were on South America.

Conflicting stories out of Brazil have the trucker strike there on one moment and off the next. Most recently, the government has threatened fines of $1,700-$3,400 per hour on striking truckers who have blocked roads. Despite the threat of fines, reports are that many road blocks continue.

Argentina’s Agriculture Ministry estimates it’s 14/15 soy crop at  58.0 million tonnes, up from 53.4 million. It’s 14/15 corn crop is estimated at 30.0 million tonnes, a drop of 3 million

Update – Morning Coffee Commentary:

The International Grains Council estimates that world corn production will fall by five-percent in 15/16, and that the wheat crop will fall by two-percent. Despite their estimated production declines, the Council estimates that ending stocks will remain “comfortable”.

China’s State Administration of Grain says it will add 50 million tonnes of grain storage this year as part of it’s stockpiling plan.

If you missed our spring acreage forecast, including a spring weather update and a “fund money” perspective, you can still get the presentation recording at no cost.

Ag commodities virtually ignored the dollar yesterday which saw a big move to the upside. More economic data out today including the second look at fourth-quarter GDP, and consumer sentiment could be movers of the dollar today.

Senate Democrats are asking the USDA for new pathogen performance standards for pork and beef products, citing a CDC report which states that cases of Salmonella in the US have not been declining.

Cattle trade will be interesting to watch today as the live contract saw a big move on weather concerns yesterday. Cash cattle are still officially $157 in most locations but there was talk of $159 bids showing up in Nebraska. We have even heard of some rumors that cash will trade at the $162 offering price that feedlots have posted.

With the volatile trade this week, today’s close in most ag commodities will be important for next week’s price direction.

Markets as of 5:30 AM CST

  • Mar Corn  + 3/4
  • Mar Beans + 4 1/2
  • Mar Wheat   +4
  • Mar Soymeal -.7
  • Mar Crude   +.90
  • Feb Gold   -2.3

Technical Chart of the Day

daily chart

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    Allendale Advisory Contributor:


    Paul Georgy

    Paul is one of the founders of Allendale. He is very active in the futures industry and currently serves on the Board of Directors of the National Futures Association.