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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.

Big Buying Of Spreads Push Old Crop Corn Higher

Apr 04, 2012

Good Morning! Paul Georgy with early morning comments for April 4, 2012 at 5:10 am. Grain futures are mixed as grain traders react to FOMC minutes. Fed decides on no QE3 at this time. Buying old crop corn and selling new crop had huge volume yesterday. Traders are convinced the USDA will subtract the 150 million bushel lost on the Quarterly Stocks right off the ending stocks of 2011/2012 corn. We think it is unlikely that will happen but do agree old crop supplies will remain very tight until new crop is harvested. New crop soybeans are gaining on old crop and on corn. Support in beans is coming from the expectation that next week’s supply and demand report will tighten stocks even further. Brazilian bean crop continues to get smaller on a daily basis. Celeres reduced their estimate of Brazilian bean production to 67.9 and Oil World dropped estimate to 65-66 mmt. Argentina’s bean production was lowered by the Rosario Exchange by 1.4 mmt to 43.1 mmt. Weather forecasts for next week seem to be pushing the cold temps further south with 32 degrees down as far as IA/MO border. We expect some profit taking ahead of the long weekend but markets should find support on any corrections as we approach the USDA Report next Tuesday at 7:30 and the uncertainty of weather over a long weekend. Cattle futures set new lows on Tuesday not seen since June of 2011. Fund and margin liquidation continue to pressure the livestock complex. Choice boxed beef was down 1.01 and select was down 1.44 on Tuesday. Beef battles for consumer’s spendable income with gas prices. The hopes of warm weekends will start the cookout season early this year. There has been a light test of cash sales at 3.00 lower than last week. Pork cutout values were down 1.53 yesterday afternoon. Allendale Research Center "Planting Special" is giving you the opportunity to subscribe for only $99.00.
Markets as of 5:10 AM
May Corn    +2 1/4
May Beans   -2 1/4
May Wheat   -6 3/4
Apr Cattle -.05
Apr Hogs    -.175
Jun S&P     -10.75
Jun $ Ind   +.10
May Crude   -.75
June Gold   -37.5
Allendale Advanced Charts
Soybeans took out yesterday’s high but couldn’t hold and settled near session lows. This is not surprising given the recent sharp rallies. A correction would be healthy for this uptrend.
Nelson Notes from the desk of Rich Nelson
USDA restarted the weekly Crop Progress reporting Monday. Corn planting was estimated at 3% as of Sunday night. That was above the 2% pace for last year and the 2% pace for the five year average. We expect planting to surge far above normal over the next two weeks.
Contact Allendale: 800-262-7538
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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