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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.

Looking For Feed For The Bulls

Oct 15, 2012

Good Morning! Paul Georgy with early morning comments for October 15, 2012 at 5:10 am. Grains are lower as a risk-off attitude dominates the commodity markets. Closing out the week on Friday left little support for the bulls. The corn market needed a close above 7.68 to have the technical traders stay friendly. There were rumors late last week that another 1 million tonnes of corn was going to be imported into the livestock feeding areas of North Carolina. Rich Nelson compared prices of US corn at Toledo $7.78, US corn at the gulf $8.39 and Argentina corn at $7.08 a bushel. It is pretty easy to see why corn is being brought in. They normally pull grain from the eastern Midwest which is some of the hardest hit areas by the drought. The USDA made no adjustments for corn imports on the October S+D report. This week should be wetter in most of the Midwest but with only 15 to 20% of harvest left it will not be a major factor. South America should see more rain in Brazil but Argentina maybe getting a little more than needed, although it is early in the planting season. About 15% of the Australia wheat growing area is being affected by dryness. NOPA crush report is out later this morning and the monthly Cattle on Feed will be released on Friday. Weaker grain prices should provide support for feeder cattle. While hog futures may see some further adjustments in Dec-Jun spreads. Boxed beef closed mixed on Friday, choice up .36 and select down .28. Pork cutout was down .66.
Markets as of 5:10 AM
Dec Corn    -11 1/2
Nov Beans   -31 1/2
Dec Wheat   -5
Dec Cattle steady-Lower
Dec Hogs    Steady-Lower
Dec Dlr     +.04
Dec S+P     +6.50
Nov Crude   -.25
Dec Gold    -11.80
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Allendale Advanced Charts
Dec Corn gave back a considerable amount of Thursday’s gains on Friday. I still feel that while we have seen strong interest from buyers on report days that lack of follow through buying implies that this market is still in a downtrend. I feel that these recovery attempts provide excellent opportunities for producers to price in unprotected bushels…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Despite what is a very poor export pace compared to USDA expectations, the government only lowered US wheat exports by 50 million bushels. It is clear the government is concerned about available corn supplies and assumes US wheat may play a role in filling world feed needs later on.
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