August 30, 2014

Wake Up Call

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Markets Quiet Overnight

Good Morning! Paul Georgy with the early morning commentary for August 14, 2014 at 5:30 am.

Grain futures are lower as weather forecast increase chances of rain.

Traders Focus Today: USDA yield estimates too low for corn and soybeans, large world wheat supplies and weather forecasts seen as more of the same.

Stay updated on weather by reading or listening to Allendale’s Meteorologist Ryan Martin.

Rich Nelson, Allendale’s Chief Strategist, studied other record production years for corn, and suggests we have a larger increase on the horizon. The small increase of 1.3% from July to August set the stage for a 5.2% increase by January which equates to a final yield of 176.

NOPA crush for July will be released on Friday at 11:00 am. Trade estimate is 115.82 million bushel domestic crush for July 2014.

Trade estimates for weekly exports range from 100,000 to 200,000 tonnes of old crop and 500,000 to 700,000 tonnes of new crop. In soybeans estimates for old crop sales to be 0 to 100,000 tonnes and new crop sales of 850,000 to 1,050,000 tonnes. Wheat sales are estimated at 450,000 to 650,000.

Get the export sales results in our Morning Coffee Update:

China’s import of soybeans during 2013/14 is likely to be over 70 mmt which would be a year over year 17% increase.

USDA increased its old crop corn for ethanol estimate from 5.075 to 5.120 billion bushels. This is a year over year increase of 10.2%. Year to date production is 9.8% higher. Cheap corn prices and profitable ethanol crush margins are keeping processors at full capacity.

Transportation bottlenecks are creating major problems for elevators and ultimately the farmer. The wide basis in the northwestern cornbelt has cash prices in some location at $2.50 per bushel. Midwest elevators are concerned about getting old crop corn moved before new crop harvest starts. The bumper harvest will not be easily captured.

YS4

The changing of political policy can change meat supplies by a stroke of pen. When Russia banned US poultry it was like increasing pork supplies by 2.4%. When you add in the heavier weights and a backlog of market ready hogs it helps to understand the weakness in hog prices.

Last trading day for August Lean Hog Futures and Options is today. Pork cutout value is down 2.54.

Beef values are weak with choice down 1.27 and select down 3.58. CME Feeder Index is 222.97.

Markets as of 5:30 AM CDT                                                                    

  • Dec Corn   -1 3/4    
  • Nov Beans   -3
  • Sep Wheat   + 3/4
  • Oct Cattle  -.05
  • Oct Hogs    -1.82
  • Sep Dlr     -.07
  • Sep S&P     +3.00
  • Sep Crude   -.12
  • Oct Gold   +1.50

Chart of the Day

daily chart

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

    Allendale Advisory Contributor:

    Pgeorgy

    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.

    MiddayWeather-Vane

    WUC