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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.
 

Beans and Wheat Still Pulling Back

Oct 02, 2012

Good Morning! Steve Georgy with early morning comments for October 2, 2012 at 5:10 am. The grains are finding a similar start to the morning. Corn is finding support with beans and wheat under pressure once again. Corn was the strongest yesterday with spreaders unwinding positions after the friendly USDA numbers last week. Funds were buying beans and wheat, selling corn going into the report. Corn harvest is now 54% complete with beans 41% compete before this week. We should continue to see harvest chug along at a good clip. The forecast is projected to give producers another good week to get work done. The grains will most likely continue to find harvest pressure on rallies. Bean yields continue to come in higher than expected even after a significant drought across the Corn Belt. The trade continues to talk about the possibility of seeing USDA raise yields on the next report. This comes at a time were Argentina and Brazil are expected to get 1-2 inches of rain over the next 24 hours and looking at another 1-2 inches of rain Thursday and Friday. This will greatly improve conditions and should improve the bean outcome. USDA has Brazil looking at a record 81 million tonne crop and Brazil’s Celeres just increased projections to 79.08 million tonnes. Not only are traders seeing bigger yields but demand should be light this week with China on Holiday. Mexico announced yesterday that they are looking to purchase 100,000 tonnes of corn from an optional origin. This is concerning if we continue to lose sales due to high prices. The Agricultural Secretary, Tom Vilsack said yesterday "The United States will not run out of corn despite drought losses and tight beginning stocks." This should cap any significant rally corn may have from these levels. The dollar once again today is not influencing the grains or the macro picture in any way.
 
 
Markets as of 5:10 AM
Dec Corn    -1/4
Nov Beans   -15
Dec Wheat   -7 ¾
Oct Cattle -.25
Oct Hogs    +.25
Dec Dlr     -.07
Sep S+P     +6.75
Nov Crude   +.21
Dec Gold    -2.4
 
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Allendale Advanced Charts
Nov Soybeans reconfirmed the downtrend with yesterday’s failure at the $16.00 level. We seem to be building a support level at $15.60 with the last three days low falling right at the this level. If we do see a close below $15.60 this will open up the Soybean market to further losses…Frank La Placa
 
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Nelson Notes from the desk of Rich Nelson
The latest quarter finished out with strong gains for commodities. The CRB index, a broad measure of overall commodity prices, rose 8.8%. For the grains particularly, December corn rose 19%, November soybeans gained 12%, and December wheat picked up 16%.
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