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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.

More Liquidation Overnight in Grains

Jan 03, 2013

Happy New Year and Good Morning! Paul Georgy with early morning comments for January 3, 2013 at 5:10 am. Grain futures are lower on continued liquidation. The market was surprised yesterday by the heavy selling pressure in most grain contracts. One of the major reasons was the unwinding of spreads in the soy complex. Congress re-instating the $1.00 biodiesel credits and making it retroactive to Jan 1, 2012 caused huge liquidation of long meal/short oil spreads. This in turn pressured soybean values. Funds sold an estimated net 4,000 soymeal and bought 6,000 soyoil. Funds sold 8,000 corn contracts, sold 6,000 wheat contracts and sold 5,000 soybeans. Nearby corn futures are finding supported in the gap left from July 5, 2012 on the March chart. The gap would be filled at 6.83 ½ basis the March contract. Index fund rebalancing is due to start next Tuesday. The fear of a poor crop in South America is subsiding as Argentina is expected to be dry for the next 10 days. Brazil bean crop is progressing and many are expecting harvest to start in 2 weeks. Some are expecting 2.0 mmt to be exported by end of January. US weekly export data will be released on Friday morning at 7:30. Traders will be getting positioned for the USDA report next Friday, Jan 11. This report is likely to have an impact on prices for the first quarter of 2013. Allendale's 25th Annual Outlook Conference will be held on January 25th and 26th. Tickets are still available. Call today to reserve your seat. Livestock futures are finding support from outside markets. Cold weather has slowed movement of live hogs in the  upper Midwest. Pork cutout value was down 1.00 on Wednesday. Cash hogs should find support as packers prepare for next week’s business. Boxed beef was mixed with choice down .21 and select up 1.57. We expect to see further gains in beef product as retailers restock coolers after the holidays.

Markets as of 5:10 AM

  • Mar Corn    -5 1/2
  • Jan Beans   -16 3/4
  • Mar Wheat   -2 1/4
  • Feb Cattle  +.125
  • Feb Hogs    +.025
  • Mar Dlr     +.29
  • Mar S&P     -3.50
  • Jan Crude   -.51
  • Feb Gold    -7.00
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