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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.

Corn Ending Stocks Could Remain Unchanged

Oct 09, 2012

Good Morning! Paul Georgy with early morning comments for October 9, 2012 at 4:30 am. Grains are higher on a short covering bounce ahead of Thursday’s report. Due to a partial holiday yesterday with government offices closed we should get the harvest progress this afternoon. Trade is expecting over 70% corn harvest completed and over 60% on soybeans harvested. This week should provide dry weather conditions across most of the Midwest and excellent harvest progress. The markets are waiting for the USDA report on Thursday morning. Trade average estimates are out with corn harvested acres at 86.136 million acres, 1.25 million acres less than the USDA Sept. number. Yield is estimated at 122.9, up 0.1 bushels than Sept. Leaving ending stocks at only 648 compared to USDA’s 733 million bushel in Sept., Allendale’s estimate is close to the trade average for harvested acreage (86.060) and yield (123.3). We disagree with the ending stocks dropping as much as the trade estimates. We think the USDA will keep ending stocks for corn near unchanged at 731 million bushel. It is likely USDA will drop demand nearly as much as they drop production. The Allendale Advisory Report has more discussion on this subject. Macro markets, Goldman roll and commercial spreading will dictate volatility into Thursday’s report. Lean Hog futures are running into a seasonal period where supplies increase and demand wanes. Pork cutout values were .02 higher on Monday. With last week’s reduced slaughter, packers should be able to improve boxed beef values. Monday choice beef was .58 and select was up .72. Cash markets could trade steady to higher before the week is over. Stay in touch with Allendale Advisory Report.
Markets as of 4:30 AM
Dec Corn    +2 1/4
Nov Beans   +7
Dec Wheat   +5 3/4
Oct Cattle +.22
Oct Hogs    +.17
Dec Dlr     +.26
Sep S+P     -3.00
Nov Crude   +.40
Dec Gold    -2.80
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Allendale Advanced Charts
Dec. Wheat is trading at the low end of the sideways range that it has been stuck in for the last 3mos. Unless we see a breakout through either the highs or lows in Dec Wheat, this market poses too much of a potential whipsaw risk to conclude a direction…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The director general of the Iraqi Grain Board has purchased 1.76 million tonnes of wheat so far this year. That is down from last year’s total at this time of 2.7 mt. They currently have coverage out for the next five months. This buyer said he expects prices to fall now that planting is underway in the US and Canada.
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