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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.

COF Suggest Price Is Curbing Grain Demand

Oct 22, 2012


Good Morning! Paul Georgy with early morning comments for October 22, 2012 at 5.10 am. Grains are higher on short covering and limited cash movement. The Cattle-on-Feed Report showed us that the price of corn is slowing down demand as placements during September were 18.8% below last year. With harvest winding down and marketable supplies in strong hands, traders will be monitoring demand very closely. Export markets currently have US grains priced well above competition on the world market. It appears cash basis will be the key to unlocking those on-farm storage bins. Weather forecast in South America has Argentina a little dryer and Brazil’s dry area confined to the northeast region. The November options expire this week on Friday. Harvest progress this afternoon and weekly export sales on Thursday will be important reports in the week ahead. Reuters News reported that judging on the 12% seed sales increase in Brazil and Argentina we could see record production. Estimates are 80 mmt for the bean crop in Brazil and a 53-56 mmt crop out of Argentina. The Russian Ag Minister says he opposes any ban on exports. CFTC commitment of traders had funds reducing long positions in grains by 16,103 contract. Swap Dealers had little change in positions through Tuesday of last week. Cash cattle traded 2.00 higher on Friday at 127 to 128. The bottom-line on the report has to be considered bullish. The overall cattle on feed are now less than a year ago. We expect that trend to continue. Boxed beef was lower on Friday. Choice was down .13 and select down .43. Pork cutout values were up 1.26. Look for livestock to open steady higher this morning. We’re getting a great response for our Ag Leaders Webinar this month which will feature a look at the soy complex with Rich Nelson, Frank La Placa, and our special guest, Al Ambrose. We hope you can join us. Registration is free and open to everyone.
Markets as of 5:10 AM
Dec Corn    +4
Nov Beans   +13 3/4
Dec Wheat   +8 1/4
Dec Cattle Steady-Higher
Dec Hogs    Steady-Higher
Dec Dlr     -.08
Dec S+P     +6.00
Nov Crude   +.53
Dec Gold    +2.00
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Allendale Advanced Charts
Dec Corn is attempting to test the 10/11 pivot high of $7.76. A close above this level will negate the downtrend and set Dec Corn up for another leg higher. If we do see a failure at this level, a close below $7.32 could see the lows tested…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Ukraine: The government announced there would be no more exports after November 15. This comes as the industry nears its voluntary 5 million tonne grain export limit. The industry has exported 3.5 million tonnes so far with the unknown number of signed deals, yet to be delivered, likely pushing the total near 6 mt. This news should not be a surprise to the industry.
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