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December 2011 Archive for The Allendale Wake-Up Call

RSS By: Paul Georgy, AgWeb.com

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.
 

Get Ready For The Fireworks Tuesday Morning

Dec 30, 2011

Good Morning! Paul Georgy with early morning comments for December 30, 2011 at 5:10 am. Grain markets have consolidated overnight as traders position for Tuesday morning. There will be no trading Monday or Monday night with grain futures opening at 9:30 on Tuesday morning. The past 9 sessions have focused on the weather in Argentina. We expect plenty of fireworks on Tuesday as weather forecasts will be very important in determining the opening. Today the USDA will release the weekly export sales report at 7:30.  The estimate for corn is 400 to 600 tmt, soybeans is 300 to 500 tmt and wheat 200 to 400 tmt. The funds rebalancing will be watched closely next week. However would not expect them to sell the 21,000+ corn contracts or buy the 21,000+ wheat contracts all at one time. They will likely spread it out over several days. As we close out the year of 2011 we would expect traders to have a bias to the long side due to dry weather in South America. The next big USDA report will be less than 10 days away when we return on Jan 3. Allendale will get its estimates for the report out next week. There has been no cash cattle trade this week. Packers will likely show their hand late today. Cutout values were stronger on Thursday which is helping packer margins. Pork cutout values had little change on Thursday. Livestock futures saw profit taking yesterday. We expect more position evening going into the long weekend. Today is your last chance to sign up for the Allendale Leaders Conference in 2011. All of us at Allendale want to wish you a Prosperous and Safe New Year!
 
Markets as of 5:10 AM
Corn: 3 to 5 higher               Beans: 1 to 3 higher             Wheat: 3 to 5 higher
Live Cattle: 10 to 20 higher                         Lean Hogs: 20 to 30 higher
Dollar: .08 lower                    Crude: .29 higher                  Gold: 31.30 higher
 
Allendale Advanced Charts
After a failed attempt at taking out Wednesday’s high of 6.46 1/4, the corn market headed south on Thursday. For now this looks like nothing more than a small correction. Support remains at 6.34. Today’s close for the year end will be key. A close below support could lead to a gap getting filled next week.

Nelson Notesfrom the desk of Rich Nelson
Traders note the US dollar has appreciated to new highs for the current uptrend. It is now priced at its highest level since January 11. At the January 20 and 21 annual Outlook Conference, Allendale will reveal its longer term upside projection. This is bearish to commodities overall.
 
Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com
 
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.

Can Corn Close Higher 9 Days In A Row?

Dec 29, 2011

Can Corn Close Higher 9 Days In A Row?
Good Morning! Paul Georgy with early morning comments for December 29, 2011 at 5:20 am. Grain markets are seeing some profit-taking after 8 straight higher closes in corn. The export sales report will be released on Friday due to holiday on Monday. The index funds released their rebalancing needs which will be done between Jan 3 and Jan 15. They need to sell 21,650 contracts of corn and buy 21,948 of Chicago wheat. They also will need to buy 13,220 contracts of bean oil and sell 7160 contract of live cattle to name a few. Be aware that open interest in corn has declined during the rally this week. The auction of Italian 10 year bonds has been the talk of concern in EU for some time. The results of short term paper were supportive yesterday. Today auction of the 10 years settled at 6.98 just below the key 7% level. The USDA Monthly Supply and Demand to be released on Jan 12 will be the focus of talk after the New Year holiday. Cash cattle trade is in a standoff with feedlots wanting steady to higher prices but packers see no incentive to concede. Larger show list and short slaughter week have packers waiting until late Friday to make purchases. The first week in January will be a short week as well. Cutout values choice up 1.23 and select up 1.52. Packer margins are finally getting close to breakeven. Pork packers are full for this week and have adequate numbers for next week. Hog traders are waiting to see a pickup in demand or fund buying to continue chart uptrend. The Holiday Inn in Crystal Lake, IL advised us today that room are filling up and will hold our block until January 7th. Make your reservation now for the Allendale Ag Leaders Conference Jan 20 and 21.
 
Markets as of 5:20 AM
Corn: 0 to 1 higher               Beans: 4 to 6 lower               Wheat:2 to 3 lower
Live Cattle: 10 to 20 higher                         Lean Hogs: 30 to 40 lower
Dollar: .24 higher                  Crude: .27 higher                  Gold: 31.30 lower
 
Allendale Advanced Charts
The dollar index has bounced off the uptrend support line and 20 day moving average. The market has also pushed through the 10 day average during Wednesday’s session. Major resistance crosses at the 81.50 level.

Nelson Notesfrom the desk of Rich Nelson
Iran’s head of the navy indicated closing the strategic Strait of Hormuz would be "easy". This is the second warning in the same number of days. This threat comes as the US and EU considers sanctions on the oil industry.
 
 
Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com
 
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.

Weather in South America Takes Center Stage

Dec 28, 2011

Weather in South America Takes Center Stage
Good Morning! Paul Georgy with early morning comments for December 28, 2011 at 5:20 am. Grain markets are mixed as corn and wheat are higher and soybeans lower. Weather forecast out of South America is the major focus in grain markets this week. Brazil is expected to receive adequate rains over the next few weeks however Argentina is another story. They missed significant moisture over the weekend and the 5 to 10 day outlook is for no rain. There also is a difference in the US and Euro models. The Euro is much drier for Argentina. Look for weather forecast to dominate trade until Argentina gets rain. News out of the EU is limited. Italy’s bond auction was completed with much lower rates overnight. The lower rate is welcomed for a country in the center of EU financial crisis.  Late, last week, cash cattle sales were reported at $123 in TX and KS. It appears difficult to trade cash any stronger than last week as supplies build and futures sell-off. The short week could keep cash hogs under pressure until we get back to a full slaughter week. Futures retrace on profit-taking and light holiday volume. It is less than a month away from the Allendale Leaders Conference. Call to today and reserve your seat 800-262-7538 or click www.allendale-inc.com.
 
Markets as of 5:20 AM
Corn: 2 to 3 higher               Beans: 7 to 9 lower               Wheat: 2 to 3 higher
Live Cattle: 20 to 30 higher                         Lean Hogs: 20 to 30 higher
Dollar: .02 lower                    Crude: .45 lower                   Gold: 6.50 lower
 
Allendale Advanced Charts
Beans gapped higher on Tuesday and had no problem taking out the 50 day moving average and the 50% retracement level. The market even tested 62% near 12.20. The close was strong, but given this large bar & gap below we would not be surprised to see a pullback this week.
 
Nelson Notes from the desk of Rich Nelson
Saturday, December 31 marks the end of the ethanol blending subsidy as well as the end of the import tariff. For now, as US ethanol is cheaper than Brazilian product, the US will remain a net exporter. Over the next 10 years, the Brazil Sugarcane Association expects production to increase 10 fold and for their product to meet some US demand.
 
Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com
 
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.

Quiet Markets Ahead of the Holiday Weekend

Dec 23, 2011

 
Good Morning! Paul Georgy with early morning comments for December 23, 2011 at 5:10 am. Grain markets were quiet overnight with position evening after the volatile day yesterday. Markets are open regular hours today but closed on Monday. The electronic session Monday night will be closed with grains opening at 9:30 Tuesday morning. Washington finally came to their census and agreed to extend the payroll tax reduction. They should vote on the bill today. Congress can now go home for the holidays. The ECB has supplied low interest loans for their banks. It looks like everybody got their Christmas gifts. The Euro banks are now getting political pressure to invest their cash in government bonds. World Weather Inc. says the bottom line in Argentina returns crop stress to many areas next week as the nation dries out and warms back up after the rain Wednesday and today and after cooling abates this weekend. Crops that failed to get significant rain the past two days will see stress return immediately and will likely encounter lower yield potentials since the ground was already too dry after the rain was missed this week. Second week rainfall in Argentina does not seem to be great enough to soak any particular region. World Weather, Inc. anticipates greater advertised rainfall over Argentina in the week of Jan. 2 to show up at some point in future model runs. With weather being a key to grain markets, a 3 day weekend could give us some excitement on Tuesday. Join us at the Allendale Ag Leaders Conference and meet Drew Lerner. Cattle futures put in a strong performance on Thursday prompted by the higher outside markets. Weather is slowing feedlot performance and creating tighter market ready supplies. Product values had little change as buyers have completed yearend purchases. The USDA Hogs and Pigs Report will be released this afternoon. The next Allendale Wake-Call will be produced on Wednesday morning. We will be giving you an update Tuesday on the Morning Coffee. All of us at Allendale want to wish you a very Merry Christmas and a Safe weekend.
 
Markets as of 5:10 AM
Corn: 0 to 1 higher               Beans: 2 to 3 higher             Wheat: 1 to 3 higher
Live Cattle: 20 to 30 higher                         Lean Hogs: 20 to 30 higher
Dollar: .14 lower                    Crude: .23 higher                  Gold: 1.00 lower
 
Allendale Advanced Charts
Cattle closed up the limit on Thursday after the market was able to push through retracement levels and the 200 day moving average. The close was just above the downtrend line. Today’s trade will be interesting to watch as there is a three day holiday weekend ahead of us.
 
Nelson Notesfrom the desk of Rich Nelson
The General Administration of Customs reports China imported 2.5 million tonnes of soybeans from the US in November. From South America, they purchased 3.0 million. This confirms well known market talk that Brazil and Argentina are running the show in what is typically a US supplied time of year.
Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com
 
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.
 

Weekly Export Sales Release This Morning

Dec 22, 2011

Good Morning! Paul Georgy with early morning comments for December 22, 2011 at 4:40 am. Grain futures are slightly lower on profit-taking as holiday week approaches. The macro markets are setting back after the early week rally. Some of the enthusiasm has disappeared after the first round of long-term refinancing operations by ECB. The action in Washington between the House of Representative and the Senate on the payroll tax bill continues to add uncertainty to a market where volume continues to decline. The grains are again being impacted by weather in Argentina. Yesterday temps hit record levels in some areas with highs between 100 and 110. About 40% of region received rain with a total coverage expected this week of 70%. Temps are cooling down with current system moving through. Brazil should get rain later this week. Traders will be watching for the Weekly Export Sales numbers which will be released at 7:30 today. Sales are expected to range from 400-600 tmt of beans, 80-150 tmt of meal, and 2-10 tmt of soyoil. Estimate is at 450-650 tmt for corn and 350-550 tmt for wheat. Choice beef was up .29 and select was down 1.39 on Wednesday. Cash cattle are still at a standstill. Pork cutout values were down .18 with cash and futures under pressure Wednesday. The USDA will release a Hogs and Pigs report on Friday afternoon. Markets will be closed on Monday and there will be no night session on Monday. Therefore there will be no Wake-Call on Monday or Tuesday morning next week. We wish everyone a merry and safe holiday.
 
Markets as of 4:40 AM
Corn: 3 to 5 lower                Beans: 5 to 7 lower               Wheat:3 to 5 lower
Live Cattle: 15 to 25 higher                         Lean Hogs: 10 to 15 higher
Dollar: .05 lower                    Crude: .09 higher                  Gold: 3.10 lower
 
Allendale Advanced Charts
The dollar index tested the bottom of the uptrending channel on Wednesday, but has since rebounded and is pushing toward the 10 day moving average again. A close above the 10 day moving average could allow a move to 81.00.

Nelson Notesfrom the desk of Rich Nelson
The General Administration of Customs reports China imported 2.5 million tonnes of soybeans from the US in November. From South America, they purchased 3.0 million. This confirms well known market talk that Brazil and Argentina are running the show in what is typically a US supplied time of year.
 
Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com
 
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.

Grain Markets Waiting for Some Demand

Dec 21, 2011

 

Grain Markets Waiting For Some Demand
Good Morning! Paul Georgy with early morning comments for December 21, 2011 at 5:10 am. Grain markets traded in a narrow range overnight. It is hard to find news that directly relates to grains. For those focused in on the weather in South America, Argentine forecasts have put a little more moisture in for the crop region. Brazil should see some rain over the next few days. The outside markets are filled with uncertainty. The inability to pass the payroll bill in Washington has supported the euro and pressed the dollar. It is likely this issue will not be solved until the deadline next week. The bonds auction in Spain and long-term repo operations by the European Central Bank is providing hopium for the Eurozone investors. Unrest in Kazakhstan is providing extra fuel for bulls in the crude oil market. Technical resistance in March corn crosses at 6.10 and 6.16. January Beans struggle to break through the 11.50 area. The snow storm in the southern plains is not as bad as forecast which is causing a setback in cattle futures. Cash trade is being influenced by poor weather conditions for moving cattle and moving product. Next week is a short week and packers will not need as many cattle. Product demand is still very sluggish although choice was .99 higher and select was up .84 on Tuesday. Pork cutout dropped 2.90 as packers try to clean up inventory. Our staff will be happy to answer any questions; you can reach us at 800-262-7538. The Allendale’s Leaders Conference promise to be a meeting you should not miss. Sign up today at www.allendale-inc.com. For subscribers don’t forget to look at the Christmas Price study for corn and beans, VERY INTERESTING!
 
Markets as of 5:10AM
Corn: 1 to 2 lower                Beans: 1 higher to 1 lower               Wheat:2 to 3 lower
Live Cattle: 20 to 30 lower                           Lean Hogs: 30 to 50 lower
Dollar: .15 lower                    Crude:.25 higher                   Gold: 9.20 higher
 
Allendale Advanced Charts
Spring wheat saw plenty of follow-through strength today that brought it near the 40 and 50 day moving averages. The long-term downtrend line remains in place and could stop the bulls if the moving averages are taken out. It might be wise to have sell orders near this trendline. See trade recommendations.

 

 

Nelson Notesfrom the desk of Rich Nelson
A study by the Mortgage Bankers Association found that 80% of prospective home buyers believe now is a good time to buy. The problem is sellers. As a group they are still resistant to lowering prices to true market value. Allendale’s look at the National Home Price Index finds prices were 2% lower than last year in September. Some would suggest a bottom, or at least some stability, is being seen.

 

Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com

 

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.

Grains Firm on Weather Concerns

Dec 20, 2011

Grains Firm on Weather Concerns
Good Morning! Paul Georgy with early morning comments for December 20, 2011 at 5:15 am. Corn and soybean futures slightly higher overnight as South American weather dominates holiday trade. The crops in Argentina have some chance of moisture stress for the next few days then some relief is expected. Then more stress for early next week. Lower temps will ease some of the crop damage in Argentina. Brazil is generally in good condition but has to be watched closely for any sign of change. Light volume and oversold conditions of grain markets seems to be having an impact on the rally this week. Trading volume in all markets is light as traders have reduced risk in commodities going into the holidays. The gridlock in Washington and the lack of action in Europe appears to be with us for a while longer. Livestock futures saw aggressive buying on Monday as a winter storm treks through the southern plains cattle feeding area. The wet heavy snow will reduce weight gain and tighten market-ready supplies even further for a few days. The lack of movement of cattle should help support beef prices. Monday choice beef was up .43 and select was up 1.17. The pork complex received support from short covering. Pork cutout was up .14 on Monday afternoon. Stay in touch with Allendale staff as we will be ready to talk about markets throughout the holiday season. Call us at 800-262-7358.  
 
Markets as of 5:15AM
Corn: 1 to 2 higher               Beans: 3 to 5 higher             Wheat: 2 to 3 higher
Live Cattle: 20 to 30 lower                           Lean Hogs: 30 to 50 lower
Dollar: .35 lower                    Crude: 1.25 higher                Gold: 10.30 higher
 
Allendale Advanced Charts
Corn bounced off the neckline on Monday and closed a penny above the key $6.00 level. This could give the bulls a reason to take the market up towards the most recent high of 6.16.

Nelson Notesfrom the desk of Rich Nelson
The farm minister of India estimated the current wheat crop, set for 2012 harvest, will be a new record. This sounds even more impressive when you consider the fact 2011’s harvest was a record itself at 85.93 million tonnes.

Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com

 

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.

South American Weather Sparks Rally

Dec 19, 2011

Good Morning! Paul Georgy with early morning comments for December 19, 2011 at 5:15 am. Grain markets are firmer as weather concerns out of South America intensify. Drew Lerner from World Weather Inc has the following comments, "Almost all of Argentina’s summer grain and oilseed production region is enduring one level or another of stress. Early season yield potentials may be sliding lower and if rain late Tuesday and Wednesday of this week fails to be generalized the situation may go from bad to worse when dry weather resumes. However, the odds are good that at least some rain will fall in the majority of crop areas this week and a follow up event "may" occur during mid-week next week to slow the decline in crop and production potentials." If you want your weather questions answered by Drew, attend the Allendale Conference in January. The death of the North Korean leader adds uncertainty to world markets in a week where traders likely will want to reduce risk. The EU leaders are promising to work through Christmas in hopes of finding a solution for the debt crisis. Rich Nelson, Director of Research at Allendale has posted these comments about the Cattle on Feed Report released on Friday in the Allendale Research Center. "Negative news was seen on all sides. The Cattle on Feed report indicated Placements +4.1% over last year’s November. That was more than the 0.4% decline that was expected. Since November Placements of new calves and feeders will be marketed as fat cattle between April and August, this is bearish for the summer contracts. Marketing’s of cattle already finished in November were 0.2% lower than last year. That was higher than estimates of a 1.5% decline. More cattle leaving feedlots than expected last month means fewer available right now which is neutral to slightly supportive the nearby contract. The total feedlot population, Cattle on Feed, is now 4.0% larger than last year." Cash cattle traded actively at $118 on Friday. That was down $2 from last week. Choice and select beef were .91 and .98 higher on Friday. Pork cutouts fell 1.48 on Friday; expect a lower opening this morning. Stay in touch with Allendale Research Center as we approach 2012.
 
Markets as of 5:15AM
Corn: 8 to 9 higher               Beans: 13 to 15 higher                     Wheat: 5 to 7 higher
Live Cattle: expect lower opening                           Lean Hogs: steady to lower opening
Dollar: .01 lower                    Crude: .30 higher                  Gold: .09 lower
 
Allendale Advanced Charts
Hogs have come under pressure the past few sessions and have continued to hold a sharp downtrend. We have also broke most major support levels. The next area to look at will be 80.97. Look to continue to sell this market on rallies until we see a key reversal.

Nelson Notesfrom the desk of Rich Nelson

The Buenos Aires Grains Exchange has raised its estimate of the current wheat harvest from 13.0 to 13.6 million tonnes. Harvest will last into January. For comparison, the Rosario Grains Exchange sees the crop at 12.8 mmt while USDA is up at 14.5.

Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com

 

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.

Dry Weather in South America Provides Support

Dec 16, 2011

Good Morning! Paul Georgy with early morning comments for December 16, 2011 at 5:10 am. Overnight grain futures had narrow trading ranges. A quiet Friday with some position evening is possible after a very volatile week. Corn and wheat down nearly 16 cents and soybeans up 4 3/4 from last Friday through yesterday’s close. The outside markets have had large moves. The dollar was up 180 points while gold down 139.60 and the commodity index was down over 20 points. The European uncertainty is still very much alive. The credit ratings downgrade by Fitch of major US and foreign banks have money managers pulling out of commodities. The US senate leaders say they are getting closer to finding a solution for the spending issues. The weather in South America is dry through mid-week. If no rain shows up, the dryness will become more serious and may provide some buying interest. The mild temps and adequate soil moisture will help ease crop damage. Grain seems to be moving as I noticed many grain trucks on the road during my travels to central Nebraska. We had customers tell us yesterday that a major grain dealer was offering free DP on soybeans. That likely will open the bin doors on some beans. Corn basis has begun to slipped in some areas. Cash cattle trade is still at a standstill. Dressed beef prices were up slightly on Thursday. The USDA will release the Cattle on Feed report this afternoon at 2 pm. Feb lean hog futures had the lowest close since June 6, 2011. We expect volume to be light the last 2 weeks of the year. Stay tuned to Allendale Research for trading and risk management ideas. Looking for a last minute Christmas gift? Think about giving a ticket to the Allendale Leaders Conference in Crystal Lake, IL on January 20 and 21, 2012.
 
Markets as of 5:10AM
Corn: 0 to 1 lower                Beans: 2 to 4 higher             Wheat:0 to 1 lower
Live Cattle: 20 to 40 lower                           Lean Hogs: 15 to 30 lower
Dollar: .18 lower                    Crude: .10 lower                   Gold: 14.70 higher
 
Allendale Advanced Charts
Corn traded near unchanged most of the session on Thursday, but settled into a new low for the move. This weak close could lead to further selling as we close out the week. Next support sits down at the 5.55 level in the March contract.

Nelson Notesfrom the desk of Rich Nelson
Weekly corn sales, covering sales up until last Thursday, totaled 504,700 tonnes for old crop. That was 50% of the normal pace for that week. To meet USDA hopes we need to rebound to only a 30% lower than normal pace. This is slightly disappointing.

Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com
 
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.

Quiet Markets as Holiday Approaches

Dec 14, 2011

 

Good Morning! Paul Georgy with early morning comments for December 14, 2011 at 5:00 am. Today we are reporting from Omaha, NE where it is cold and rainy. Grain markets overnight are very quiet with narrow ranges. The December corn, wheat, soy meal and soy oil contracts go off the board today. EU financial situation is still on center stage which likely will make the market even choppier going into holiday markets at yearend. The battle in the US Congress continues over the jobs bill and appears to be going down to the deadline again. This is creating a confidence issue with investors. Weather conditions are getting attention as the forecast for no rain in Brazil and Argentina until next week has traders buying futures. There have been a few Brazilian firms reducing the bean crop size already because of dry conditions. Our weatherman is looking for reduced moisture until mid-next week with relatively cool temps. Good coverage is in the forecast for the Dec 21-23 period for crop areas. Demand is being watch closely for what price will demand come back to grain markets. Weekly exports report will be released tomorrow morning. Cash cattle trade is at a standstill with packers hoping to buy cattle 2.00 lower this week. Cutout values were mixed in yesterday’s trade. Product could see some fill-in buying ahead of the holiday week. Pork product was up .66 on Friday. This is the time to get signed up for Allendale Ag Leaders Conference on Jan 20 and 21, 2012. It makes a GREAT Christmas gift. Looking forward to seeing many of you at the AgriGold Meeting in Lincoln NE this evening.
 
Markets as of 5:00AM
Corn: 1 to 2 higher               Beans: 1 to 2 lower              Wheat: 1 to 2 higher
Live Cattle: 10 to 20 lower                          Lean Hogs: 20 to 40 lower
Dollar: .11 higher                  Crude: .70 lower                   Gold: 28.90 lower
 
Allendale Advanced Charts
March corn has fallen into a sideways pattern as we approach the holidays. Support is buiding above the neckline of the head and shoulders formation. See trade recommendations.

 

Nelson Notes from the desk of Rich Nelson
The analysis firm out of the EU, Oil World, is now calling for stepped up levels of US soybean exports. They suggest many buyers had been holding off from purchases as the grain market turned bearish. However, the change in market sentiment for South American production could cause them to turn back to procurement of US supplies. Oil World forecasts Brazilian soybean production at 72.8 million tonnes. That is in the range of the Brazilian government and analysis firm, AgRural. Those two numbers were 71.29 and 73.1 mt. We must point out this is now three groups that are below USDA’s current 75 mt expectation. The group’s expectation for Argentina, at 52 million tonnes, is equal with USDA.

 

 

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

 

 

Dryness in South America Attracts Attention

Dec 13, 2011

Good Morning! Paul Georgy with early morning comments for December 13, 2011 at 5:20 am. Grain markets are firmer as dryness in Argentina and Brazil is getting attention. In recent days there have been a few Ag groups from Brazil who reduced the size of crop due to dryness. Our weatherman agrees with less moisture for a few days but believes cooler temps will reduce crop damage. Grain futures oversold status is supportive as money moves to a cheaper product. Moody and Fitch rating agencies are disappointed in EU leaders action which is causing fund managers to reevaluate their confidence is equities. The CFTC weekly Commitment of Traders report showed large spec traders reducing size in corn, beans and wheat. Going into yearend it would appear unlikely they will be back as players unless there is a shift in confidence in EU or a sharp increase in demand for agricultural products. Cattle futures rallied on Monday when afternoon beef product came in higher. Late data put choice beef up 4.12 and select up .12. The lean hog futures closed well off the lows and showed signs of a possible technical turnaround. Forward the Allendale Wake-Up Call to a friend. You have my permission. Thank you and Happy Holiday’s.
 
Markets as of 5:20AM
Corn: 2 to 3 higher               Beans: 2 to 3 higher                         Wheat: 3 to 4 higher
Live Cattle: 10 to 20 lower                          Lean Hogs: 20 to 40 lower
Dollar: .20 lower                    Crude: 65 higher                   Gold: 1.20 higher
 
Allendale Advanced Charts
March soybean futures checked for sell stops below the 11.00 area on the opening Monday, but was able to close higher on the day. Closing near the high of the day gives us an indication of potential bottom and also Monday’s low will now be critical support.

Nelson Notes from the desk of Rich Nelson
Trading funds, classified as Managed Money, are now net short 10,193 contracts of soybeans. This is the most bearish they have been on soybeans since October 10, 2006.

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

Dollar Rallies on No Deal in EU

Dec 12, 2011

 

Good Morning! Paul Georgy with early morning comments for December 12, 2011 at 5:25 am. Grain markets were quiet overnight on light volume. Markets were adjusting from USDA numbers released on Friday when the US ending stocks of soybeans was raised by 35 million bushels. World corn ending stocks were raised significantly as well. Next month’s supply and demand report will be watched closely because that is when the USDA can make major changes in supply and adjust previous data. Traders are already beginning to prepare for this report. The euro is under pressure this morning as investors are worried about the indecision coming out of the summit in Brussels. England is the only country not in agreement with plan but others will have to have national votes in their countries to ratify such a change. This could take months which could create short term financing problem. The livestock markets are expected to open lower this morning as outside markets and last week’s cash news weigh on traders’ minds. Cash cattle traded $4.00 lower on Friday and product was down over a dollar. The charts look heavy as technical support was broken in hogs and cattle on Friday. Stay tuned to Allendale Research as we go into choppy holiday markets.
 
Markets as of 5:25AM
Corn:   1 to 2 lower                 Beans: 4 to 6 lower              Wheat: 1 to 2 lower
Live Cattle: called steady lower                               Lean Hogs: called steady lower
Dollar: .58 higher                   Crude: 1.26 lower                   Gold: 31.80 lower
 
Allendale Advanced Charts
Soybeans felt pressure from a bearish USDA report, held a quarter cent above the key 11.00 area. However, the close was in the lower half of the trading range which creates concern if the market can hold support.

 

 

Nelson Notes from the desk of Rich Nelson
According to the USDA on Friday morning, there was no loss in corn production this year. Increases in non-US production, totaling 8% this year, offset our yield problems.

 

 

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

 

USDA Releases Data at 7:30 Today

Dec 09, 2011

 

Good Morning! Paul Georgy with early morning comments for December 9, 2011 at 5:15 am. Grain futures are nearly unchanged as spreaders do last minute adjusting. Three events will give the headline traders ammunition today. We expect some announcement on progress the EU the leaders are making as they work on a solution for financial crisis. The USDA will be giving us an update to supply and demand for grains at 7:30. The trader is expecting reduced ending stocks for corn. However, Allendale is looking for a sizeable increase in ending stocks in corn and soybeans due the very poor export sales. Historically, the USDA does not make any adjustments on production in the December report. Soybeans could have an increase in stocks of 20 to 30 million bushel due to lack of China buying. The third issue is the weather forecast in South America. The GFS model is reducing moisture in the 10 day forecast in Argentina and parts of Brazil. Crops likely will not see any significant damage as temps are relatively cool. We should have some volatility in commodity markets today as we go into the weekend. We have some creative option strategies for December ‘12 corn futures, call your Allendale representative. The hog futures were hit with selling pressure once the 200 day moving average was broken. Pork cutout values have shown improvement in recent days as prices gained 1.81 Thursday. Pork values are attractive as we see fill-in buying for Christmas. We are hearing market ready hogs are tighter as producers hold back for herd building. Cash cattle were at a standstill on Thursday. However the product values have taken a nosedive. Choice down 4.44 and select was 2.09. It is getting harder and harder to trade cattle at steady money this week. Call you Allendale Representative about today’s special Conference pricing. Watch the Morning Coffee on YouTube for a breakdown of USDA Report.
 
Markets as of 5:15AM
Corn:   1 to 2 higher               Beans: 3 to 5 lower              Wheat: 1 to 2 lower
Live Cattle: 40 to 60 lower                            Lean Hogs: 10 to 20 higher
Dollar: .37 lower                    Crude: .45 higher                   Gold: 10.40 higher
 
Allendale Advanced Charts
Corn found some late strength on Thursday and managed to close a quarter cent above the key 6.00 level. Last week’s high of 6.16 is first resistance on this chart, while support is Tuesday’s low of 5.80. You must be aware of the large head and shoulder formation that would be confirmed on a close below 5.80.

 

 

Nelson Notes from the desk of Rich Nelson
For five weeks in a row, corn sales had been troubling. To meet USDA hopes they have to rebound to only 30% under normal from here on out. Thursday’s numbers, at 695,500 tonnes for old crop, were 31% under normal and are considered supportive.

 

 

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

 

Waiting for USDA Supply and Demand on Friday

Dec 08, 2011

 

Good Morning! Paul Georgy with early morning comments for December 8, 2011 at 5:10 am. We want to thank Nancy, Mark and everyone at the Farmers State Bank in Albert Lea, MN for their hospitality and successful meeting. Grain futures are lower as we wait for information out of EU and USDA. We will be receiving the weekly export sales numbers at 7:30 this morning. Estimates for corn are 300 to 500 tmt, soybeans 400 to 700 tmt, and wheat 300 to 600 tmt. European leaders are scheduled to meet at the Euro Summit on Friday. Pressure is on them to work out a plan to save their economies. Demand is a big part of the equations that is pressuring the grain futures. Unless we get a surprise purchase by China, prices will likely struggle into year end. Brazil is receiving moisture in areas which were dry and Argentina should get rain starting this weekend. We will need an injection of confidence from Europe or a few large sales to rekindle buying of futures. Beef cutout values were higher on Wednesday with choice up .69 and select up .88. Cash cattle trade has been at a standstill so for this week. Pork cutout values were lower on Wednesday. Lean hog futures have consolidated near the 200 day moving average. Call us today to sign up for the Allendale Ag leaders Conference on Jan 20 and 21, 2012.
 
Markets as of 5:10AM
Corn: 4 to 6 lower                Beans: 3 to 5 lower              Wheat: 6 to 8 lower
Live Cattle: 15 to 20 higher                        Lean Hogs: 20 to 30 lower
Dollar: .01 lower                    Crude: .24 higher                  Gold: 4.70 lower
 
Allendale Advanced Charts
Beans settled higher on the day, but the trading range was narrow and still within the bigger sideways range seen over the past few weeks. Support remains down at 11.02 3/4. See trade recommendation in Allendale Advance Charts.

 

 

Nelson Notes from the desk of Rich Nelson
Wednesday’s weekly ethanol production report was a record breaker! Production last week averaged 954,000 barrels per day. That cleanly broke last year’s 939,000 record week. Producers are still pushing production at extremely high levels before the end of the blending subsidy at the end of the month. Since September 1, the start of the new marketing year, production has run 2.5% over previous year. USDA’s latest estimate is for a slight decline in production this year (5.021 billion bushels 2010/11 vs. 5.000 billion for 2011/12).

 

 

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

 

Grain Traders Even Positions ahead of USDA Report

Dec 07, 2011

 

Grain Traders Even Positions ahead of USDA Report
Good Morning! Paul Georgy with early morning comments for Dec. 7, 2011, at 5:20 a.m. This morning we are reporting from Austin, Minn., where temps are 12 degrees. Grains are rallying off of short covering from oversold markets. There has been no change to fundamentals; however, we are getting closer to the USDA monthly supply and demand report, which will be released on Friday morning. Macro markets are keeping a watchful eye on the EU leaders meeting on Friday. The S&P ratings firm has warmed the Euro countries that serious progress must be made or it is likely they will lose the AAA ratings. The technical turnaround seen on the charts yesterday may be short-lived unless China comes in as a large buyer again or the Argentina weather becomes seriously dry. Beef values were slightly higher on Tuesday, while cattle futures were lower. The premium of cash to futures is limiting deliveries against the December contract. Pork cutout values were higher yesterday. Hog futures were led higher by nearby contracts as cheaper inputs fuels ideas of herd building tightening supplies. Sign up for the Allendale Conference in January and you will receive Drew Lerner’s forecast for 2012 firsthand.
 
Markets as of 5:20AM
Corn: 2 to 3 higher               Beans: 5 to 6 higher                         Wheat: 3 to 4 lower
Live Cattle: 15 to 20 lower                          Lean Hogs: 20 to 30 lower
Dollar: .15 higher                  Crude: .11 lower                   Gold: 4.70 lower
 
Allendale Advanced Charts
Although the corn market rebounded into the close on Tuesday, it also confirmed a large Head & Shoulders Top formation on the chart early in the session. The objective sits down at 3.75, which might be a tad unrealistic at this point, but worth pointing out. See trade recommendation in Allendale Advance Charts.

 

Nelson Notes from the desk of Rich Nelson

Rains directly during harvest season in Eastern Australia could harm quality. Just like last year, this could mean an abundance of feed quality wheat versus higher grading milling. Asian grain traders suggest this additional feed quality product could further pressure corn prices in the feed grain market.

 

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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 of 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.

 

Headlines, Macroeconomic Developments and Money Flow

Dec 06, 2011

 

Headlines, Macroeconomic Developments and Money Flow
Good Morning! Paul Georgy with early morning comments for December 6, 2011 at 5:20 am. Grain futures see another round of liquidation overnight taking out recent lows. Headlines, macroeconomic developments and money flow seem to have control of traders’ bias. We expect to hear ideas and agreements coming out of EU for the next few days as we approach the EU leaders Summit on Dec 9. All 27 nations are expected to be present with the hope to ratify new policy that will save the Eurozone. Meanwhile more negative news has hit the market when S&P put 6 major nations of the EU on a downgrade watch from AAA rating. Money flow appears that it may be the focus until the New Year arrives. The fundamental traders are waiting for China to arrive and buy our corn and soybeans. Price is suggesting that Argentina’s corn is currently more competitively priced. The USDA monthly supply and demand report due to be released on Friday will likely have no changes in production. However the demand side could have significant adjustments. Allendale expects corn ending stock could rise to over 900 mb and soybeans ending stocks could come in at 230 mb. That would be an increase of 35 mb form last month. Those areas in Brazil which had started to show some moisture stress should get covered with rain this week. Cattle futures sold off sharply on Monday as cutout values for choice was .83 lower and select was .71 lower. Cash markets are trying to hold the line at steady this week. Hog futures closed for the second day below key support. Pork cutout values were higher on Monday posting a plus .32. If you are going to be in the Albert Lea MN area on Wednesday come join us at the Farmers State Bank 2011 Agriculture Seminar Details can be found at http://www.allendale-inc.com/uploads/FSBMeeting.JPG Call with your reservation at 507-863-2371.
 
Markets as of 5:20AM
Corn: 7 to 10 lower             Beans: 1 to 3 lower              Wheat: 5 to 8 lower
Live Cattle: 15 to 20 lower                          Lean Hogs: 20 to 30 lower
Dollar: .07 lower                    Crude: .01 higher                  Gold: 11.00 lower
Earn a chance to win an iPad2 if you register by the end of Dec 7th.
Allendale Advanced Charts
February hog futures saw another sharp break on Monday after the markets took out the 62% retracement at 88.94. it now appears it is headed towards the long-term uptrend near 88.00. Be careful about picking bottoms in this market. See trade recommendation in Allendale Advance Charts.

Nelson Notes from the desk of Rich Nelson
Rains directly during harvest season in Eastern Australia could harm quality. Just like last year, this could mean an abundance of feed quality wheat versus higher grading milling. Asian grain traders suggest this additional feed quality product could further pressure corn prices in the feed grain market.

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

 

Headlines Will Lead Markets

Dec 05, 2011

Good Morning! Paul Georgy with early morning comments for December 5, 2011 at 5:20 am. Grain Markets are in narrow trading ranges overnight. Stock indexes suggest a higher opening for New York markets. World Stock markets are higher this morning. All 27 Euro Leaders meet on Friday but there will be many meetings between leaders this week as they set the stage. Merkel and Sarkozy will talk in Paris on Monday to prepare new political and economic ties for the Eurozone. Italy’s Chamber of Deputies approved a $40 billion package for restructuring and now Monti has to convince parliament. Headline traders will have plenty to work with again this week. South American dryness concerns should be dampened this week as most of Brazil will receive moisture. Any demand news will be supportive to corn and beans as traders wait for those daily USDA sales announced at 8:00 am CST. Corn prices in the US are still expensive when compared to SA corn and wheat. CFTC Commitment of Traders released Friday showed large traders reducing the long positions in corn and buying back some of short positions in wheat. Beef prices have went into a tailspin on Friday as Choice declined 2.25 and Select was down 1.39. Fed cattle should be supported by the winter storm in the Colorado and Kansas area this week. Hog Futures rally may have run its course as Fridays close was below recent up trend line and below key moving averages. If you are going to be in the Albert Lea MN area on Wednesday come join us at the Farmers State Bank 2011 Agriculture Seminar Details can be found at http://www.allendale-inc.com/uploads/FSBMeeting.JPG Call with your reservation at 507-863-2371.
 
Markets as of 5:20AM
Corn:   2 to 3 higher               Beans: 6 to 9 higher             Wheat: 1 to 3 lower
Live Cattle: Called steady to lower                          Lean Hogs: Called steady to lower
Dollar: .13 lower                    Crude: .50 higher                   Gold: 8.00 lower

Allendale Advanced Charts
The uptrend remain in tact in January crude. It appears headed toward last months highs on 103.37. A close above that level could open the door for another round of buying. See trade recommendation in Allendale Advance Charts.

Nelson Notes from the desk of Rich Nelson

The National Bureau of Statistics reports China’s grain production this year totaled 571.21 million tonnes. This is a large 4.5% over last year and represents a clear record high. Of that, corn production was upped to 191.75 million tonnes. That is a large increase over USDA’s 184.5 mmt estimate (285 million bushels)!

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

Hopes Of More Good News From Employment Report

Dec 02, 2011

Good Morning! Paul Georgy with early morning comments for December 2, 2011 at 5:20 am. There is snow on the ground this morning in McHenry IL. Grain Markets were quiet overnight. Thursday’s action was a low volatility day after an extremely volatile session which doesn’t necessarily give us a price direction. The EU remains very tense with hope that a solution can be worked out between the EU and IMF. Currently the IMF is playing the tough love card by requesting reform before aid. Headlines will be watched closely as the EU Ministers will meet next Friday. The bottom line of this week’s stance by world banks to support banking systems in trouble has provided some confidence for traders. However will they become buyers of grains? There are 2 major negative factors overshadowing the grain complex. Export sales are poor. We need a large buyer to step up to the plate. Why would they be looking for US corn when current values are approximately $10 over South America corn and $9 over US SRW?  South American weather is ideal for the foreseeable future. Our weather man does not see any major crop stress at this time. No active trade in the cash cattle market as feedlots prepare for winter storm in cattle feeding areas. Cutout values continue the slide as choice is down 1.17 and select is down 1.01. Hog futures have tested the uptrend support line on Thursday while pork cutout values rebound 1.09. Traders will be watching the "non-farm" employment number due to be released at 7:30. Anyone in the Albert Lea MN area, I would like invite you to attend the 2011 Agriculture Seminar next Wednesday sponsored by the Farmers State Bank. Details can be found at http://www.allendale-inc.com/uploads/FSBMeeting.JPG Call for reservation at 507-863-2371.
 
Markets as of 5:20AM
Corn: 2 to 3 lower                Beans: 3 to 5 higher                         Wheat: 1 to 3 lower
Live Cattle: 70 to 90 higher                         Lean Hogs: 20 to 30 higher
Dollar: .09 lower                    Crude: .75 higher                  Gold: 15.00 higher
 
Allendale Advanced Charts
Altoough corn closed above the 6.00 level in the March contract on Thursday it was near the low of the session. The inside does not give us clear direction alone. However a close for the week below Wednesday’s low could open the door for more selling pressure. See trade recommendation in Allendale Advance Charts page 9.

Nelson Notes from the desk of Rich Nelson
This week’s export sales report, covering sales through last Thursday the 24th, was a little disappointing. The previous three weeks saw poor sales that were 70-75% of normal. To meet USDA hopes we should be running 30% below normal. Today’s 280,600 metric tonne sale totals 61% under normal for that week. That is not much of an improvement

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

Grain Markets Waiting For Demand News

Dec 01, 2011

Good Morning! Paul Georgy with early morning comments for December 1, 2011 at 5:20 am. Grain futures are mixed in overnight trade. Headline traders should have plenty to trade on in the next few weeks. The macro markets moved the grains on Wednesday and we expect for it to continue. The Central Banks in 5 major nations’ announcement of a joint effort to lower the cost of dollar liquidity between banks surprised the market place. China even got involved by lowering their reserve requirement for its banks by .5%. The Eurozone countries have a lot of work to do in the next 10 days to meet guidelines setup to get funding. The US traders will be waiting for economic data at 7:30 this morning for validation of buying enthusiasm. Non-farm payroll tomorrow morning will be focus of economic releases. Grain traders are waiting for weekly export sales data at 7:30 this morning. Demand is the second half of the equation for higher prices. The investors have gained confidence by central bank intervention yesterday. Weather in South America is near ideal with rain forecast for later this week. Australia is wet in a small portion of wheat growing area which should not have a big impact on overall production. No cash cattle sales reported for this week but we expect they could eventually trade at steady with last week. Cutout values continue to erode even with the slowdown in slaughter. Choice beef was down .52 and select was down .82. Cash pork prices were stronger this week however carcass cutout values were down 2.10 on Wednesday. Don’t forget to sign-up for the year end special Allendale Research Center for complete coverage of markets. It is time to make your reservation for the Allendale Ag Leaders Conference.
 
Markets as of 5:20AM
Corn:   1 to 2 lower                 Beans: 3 to 5 higher             Wheat: 2 to 4 higher
Live Cattle: 20 to 30 higher                         Lean Hogs: 20 to 30 higher
Dollar: .08 lower                    Crude: .25 lower                     Gold: 1.80 lower
 
Allendale Advanced Charts
Corn finally managed to close above the key 6.00 level today. The market continues to hold above Friday’s low of 5.82. It is hard to be convince a bottom is in when settlement price is 8 cents of the highs which were made on the opening. See trade recommendation in Allendale Advance Charts page 9.

Nelson Notes from the desk of Rich Nelson
The People’s Bank of China, China’s central bank, surprised the financial world overnight by cutting reserve requirements for banks from 21.5% to 21.0%. This move increases the amount of money their banks can lend. It represents a clear shift in policy from monetary tightening, which slows economic growth, to one of easing. For almost three years, the country had been tightening. This increased growth could reignite interest in buying commodities based on "good demand" expectations.

Contact Allendale: 800-262-7538 research@allendale-inc.com www.allendale-inc.com
 
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.

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