More Rain Added for Next Week in South America
Jan 10, 2012
Good Morning! Paul Georgy with early morning comments for January 10, 2012 at 5:15 am.
Grain futures give back early gains overnight. Rains should cover 85 to 90% of Argentina during the next few days as the current systems drops .2 to 1.50 with locally 3.00 inch amounts. The concern of Drew Lerner of World Weather Inc (who you can meet in person at the Allendale Leaders Conference
on Friday Jan 20) is the ridge which develops on Friday. Euro and GFS models are now increasing the chance of moisture mid next week. The answer to how much rain develops next week may depend on the actual amounts Argentina receives this week. In two days we have a major USDA report. The results of this data will likely result in a sharply higher or sharply lower close on Thursday. Traders are expecting the USDA to reduce production in corn, increase usage and therefore lower ending stocks by an average of 99 million bushel, down to 749 million bushel from 848 million bushel last month. Wheat stocks are expected to be lower by 36 million bushel and soybeans are expected to be higher by 3 million bushel. Another data point to be watching is the winter wheat seeding. Traders are looking for an increase in total wheat acres but soft red winter wheat could be 787,000 acres less than last year. This loss is estimated because of the late corn and bean harvest in the Ohio River Valley. Those acres will likely go to corn or soybeans in April and May. The Euro macro situation has slowed the intensity of money flow as German and French leaders are working on a resolution to crisis. Funds were a big player in the corn and wheat yesterday on the close. Cattle weights are increasing and slaughter should be getting back to normal work days. Choice beef was down .52 and select was up .35. Packers will most likely wait until late week to show their hand. Pork cutout values were up .87 on Monday. The unseasonable warm weather in livestock producing areas should allow producers to send larger animals to market with better feed efficiency. Even more reasons for adjustments by USDA on Thursday’s report. Keep in touch with Allendale advisors so you can get positioned ahead of report. Only a few days until the Allendale Ag Leaders Conference
, Hope to see you there.
Markets as of 5:15 AM
Corn: 0 to 1 lower Beans: 5 to 7 lower Wheat:3 to 5 lower
Live Cattle: 10 to 20 higher Lean Hogs:30 to 40 higher
Dollar: .28 lower Crude: 1.63 higher Gold: 24.40 higher
Allendale Advanced Charts
The February Live Cattle found support where the uptrend and the 62% retracement converged. The close was neutral, but this may have been the buying opportunity we have been waiting for. Check the recommendations page on the Allendale Research Center.
Nelson Notesfrom the desk of Rich Nelson
Just as important to the changes on the US balance sheet for corn on Thursday, will be world numbers. This will include changed for Argentina. The average trade guesses calls for a decline from 127.2 million tonnes to 123.5.
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.