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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.
 

Corn Plantings Give Potential to Record Yields

Apr 18, 2012

 

Good Morning! Paul Georgy with early morning comments for April 18, 2012 at 5:10 am. Grain futures are mixed this morning following weaker demand ideas in China. The USDA said that as of Sunday the US farmer has 17% of the corn crop planted. IL had 41% planted as of last week with 6% average. KY, IN, and MO are also way ahead of average. Wheat conditions improved in the Good to Excellent category by 3% and spring wheat plantings were 37% versus 5 year average of 9%. Traders are talking about big yields already as the last 2 record planting pace years 2004 and 2010 resulted in record yields for corn. Spreading has been a major feature for corn and beans in recent weeks and is likely to continue. In several conversations yesterday with farmers it appears they are going to switch acres from corn to beans. Rich Nelson, Allendale’s Director of Research told me yesterday that it is likely to see corn acres and beans acres increase this year as price spreads now are in favor of beans and weather conditions are in favor of planting corn. The USDA will not give us the official number until June 30. Price spreads between old crop and new crop soybeans are attracting buyers to new crop due to the discount. The macro economic situation is a huge concern to traders and money flow. Watch headlines for direction. Cleaning up product inventories is a problem for packers and producers. Beef values were higher on Tuesday with choice up 2.21 and select up 1.67. The slowdown in packer production is finally taking effect. Pork cutout values are still struggling as Tuesday price was down 1.10. Only a few days left to get in on the "Planter Special", CALL TODAY!
 
Markets as of 5:10 AM
May Corn    +1
May Beans   -8 3/4
May Wheat   +0
Apr Cattle +.35
Jun Hogs    -.75
Jun S&P     -1.00
Jun $ Ind   +.33
May Crude   -10
June Gold   -3.50
 
Allendale Advanced Charts
May feeders closed above the 38% retracement level suggesting a bottom is in place. Next upside target would be the 100 day moving average at 154.20.

 
Nelson Notes from the desk of Rich Nelson
Barclays Capital estimates $2.2 billion in outflows hit commodity investments in March. This offset much of February’s $6.2 billion inflow.
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.

 

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COMMENTS (1 Comments)

John - ND
As both a meteorologist and a corn farmer, I'm surprised that more people haven't yet come to the realization that what drives big corn yields isn't planting date, rainfall, etc. They're almost universally driven by cool summer temperatures. Check it out for yourself:

http://www.danielstrading.com/resources/newsletter/2011/06/07/us-corn-yield-actual-vs-1991-2010-trendline.png

vs:

http://www.n​cdc.noaa.gov/oa/climate/research/cag3/ce.html

Create a graph of summertime temperatures for yourself and compare above/below average summer temperatures to below/above trend corn yields. The warmest 5 summers have been 1991, 1995, 2002, 2010, and 2011 - all with well below-trendline yields. The coolest 3 summers have been 1992, 2004, and 2009, all with well above-trendline yields. The only other years that have varied substantially from trendline yields are 1993 (where yields were reduced by severe midwestern flooding) and 1994 (where yields were well above trendline, likely in association with it being the 4th coolest summer during the period over the upper midwest region).
1:09 PM Apr 18th
 
 
 
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