The typical comment you may run across in the day to day grain futures trade activity reads, the lower dollar was bullish to futures, or visa versa. Allendale Inc has recently updated its research study regarding this particular statement which clearly shows there is not a correlation between the value of the US dollar and its impact on grain exports. We have not only researched the dollars relationship to corn but also have results concerning soybeans, wheat, cattle and hogs. For this particular special report we focus solely on the corn. The long standing perception has been, if the dollar is weak then corn importing countries will buy more than if the dollar was stronger and limiting their buying power. As you are able to view first hand, over the most recent 29 years, the facts are there have been 14 years when the dollars action had a reverse effect of what the perception would have you believe. Most recently in the mid 2000’s when the dollar was lower, corn exports were lower and when the dollar was higher, corn exports were higher.
This would not be the first time you would have to recognize perception vs reality and formulate it into your marketing/trading plan. If the flow of money wants to perceive a lower dollar will ultimately create strong demand for corn exports then there stands little reason to stand in front of the 100 car unit freight train. Of course just the opposite can hold true that with a rising dollar this same pool of money could perceive it will restrict corn exports and the buying enthusiasm could be limited and potentially turn the money flow into the seller’s column.
Allendale Inc respects the trade’s perception but in formulating our projected exports for corn, soybeans, wheat, hogs and cattle, do not accept it as holding merit. A very strong case in point is how the weak dollar has not helped the 2009-10 marketing year for wheat. Just last week the USDA did trim potential wheat exports by 5.3% to a new level of 900 million bushels vs its Sept forecast. It is clearly evident the weak dollar has not been a friend to the export sector. It’s happened to wheat and we can’t not assume just because the dollar is weak, the corn and soybean exports will ultimately reach USDA’s projections.
As stated at the beginning we have performed research on the grains and meats and although still not a strong correlation, guess which commodity has the best correlation, among corn, soybeans, wheat, cattle and hogs? We invite you to e-mail jvictor@allendale-inc.com for the answer.
We welcome your questions and comments.........Joe Victor
Allendale Inc welcomes any questions you may have by calling 800-551-4626 or
The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Commodity trading may not be suitable for recipients of this publication. This is not a solicitation of the purchase or sale of any commodities. Those acting on this information are responsible for their own actions. Any republication, or other use of this information and thoughts expressed herein without the written permission of Allendale, Inc., is strictly prohibited. Allendale Inc. c2009
Tuesday, October 20, 2009 2:30 PM by: Anonymous
But that's not true, they have you, the farmers.
Monday, October 19, 2009 3:13 AM by: Anonymous
October 18, 2009 2:23 PM I have had more then one grain analyst tell me that they know the NASS are not accurate, but they still use them to trade off from. Why? Because it is all they have. If you find the right ag news site you will find they criticize NASS on a regular basis.
Sunday, October 18, 2009 4:38 PM by: Anonymous
Between usda and cbot they decide my income I guess thats why.
Sunday, October 18, 2009 2:23 PM by: Anonymous
8:38: If no one believes USDA's numbers, then why do people bother to look at them? Why even consider them? I think the corn yield is too high, and will be adjusted down some, but I still think it will be a big enough crop regardless. I actually think soybeans may end up being slightly bigger than expected. So I expect corn to stay below $4, closer to $3.50, and soybeans to nug down some more.
Sunday, October 18, 2009 11:01 AM by: Anonymous
Thanks for the info. I just keep hearing how big this crop is but a lot of comments do and dont show it that way.
Saturday, October 17, 2009 6:24 PM by: Anonymous
One private firm has "stuck their necks out there." they called the lower acreage in corn back in July, which USDA showed when the revised down their corn acreage Oct 10. Their final production numbers for both beans and corn are roughly 6% less than USDA...but they are new school so obviously they suck (tongue in cheek)
Saturday, October 17, 2009 1:32 PM by: Anonymous
South America revised their production downward more than once last season as they saw crop getting smaller. Its just going to be a little upsetting if were off a lot on final production number and no private firms dont stick their necks out and revise lower if they know right now they didnt take into account a real large chunk of acres not weighing up. They already have all the base information for yield with corn plant counts and kernel counts etc. If they used 56 pound corn for a state and the actual is more like 53 make the adjustment its that simple.
Friday, October 16, 2009 8:38 PM by: Anonymous
It is no big secret that our government has a cheap food policy and it is the USDA's job to maintain that policy through it's questionable reporting system. All Allendale does is try and play pin the tail on the donkey so they can end up as close to USDA's projections in the end. But why? No one believes USDA's estimates are accurate.
Friday, October 16, 2009 8:27 PM by: Anonymous
Agree totally with 5:50. I almost feel like the sacrificial lamb in the food supply chain. Perhaps peasant. Any other you can think of?
Friday, October 16, 2009 5:50 PM by: Anonymous
Now thst the government via the grain trade and its experts have paniced some into selling grain "cheap" for there is going to be a big crop , they also have succed in saving millions of crop insurance payment dollars as well. With the cheaper food inputs costs and the goverment saving money we farmers hope the people in town appreciate what the farmer has again sacrificed for his country.
Friday, October 16, 2009 5:16 PM by: Anonymous
I grew corn last year that froze early. I had counted my rows and ears etc and came up with 135 bushel yield. Harvested it and it was 119 bushels to town. 51-52 pound corn. Harvested moisture at 26%. My point is what did allendale use for their calculation for low test weight and moisture. It might take more of a l80 bushel raw count to equal our 165 national yield with low test weights etc and corn coming off at 30% moisture. If we came up with l65 thining it was all going to weigh up wont out figures be way off????????
Friday, October 16, 2009 4:43 PM by: Anonymous
The last thing countries want is a shortage of food supplies. It doesnt matter if our dow is up or down or if gold is 400 or 1,000. We export grain under all economic situations. Its a wonderful factor to use to keep prices down for commodities though. Like the one before me shakem and roll. Just rollem in the favor of producers once in awhile. Analysts and traders in chicago see it everyday, dont they ever shake their heads and wonder what have we turned this countrys food supply into?????????????????????????????????????????????????
Friday, October 16, 2009 2:55 PM by: C.J. Oakwood
With the current world economic turmoil and the idiots we have in DC including Sec of AG Vaseline how can you predict anything on the past? The grain market is the biggest crap shoot in the world at the present time.....shake-em and roll!
