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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.

Countdown to January USDA

Jan 08, 2013

Good Morning! Paul Georgy with early morning comments for January 8, 2013 at 4:45 am. Grain futures are mixed on position evening. The USDA report on Friday has many different facets to consider. The 2012 final yield will be set by the USDA. They will also adjust harvested acres and may adjust planted acres which will impact total production for 2012. The demand side of the balance sheet is also of significant importance as they will likely lower export demand and ethanol demand. Feed and residual use is the wild card as we see it. Quarterly stocks for corn, beans and wheat plus planted acres for winter wheat could also be a market mover. South American production estimates for corn and soybeans will have a lasting impact on 2012 prices. When taking into account all the changes, you have to conclude the report will likely have something for both the bulls and the bears. Many traders are looking for this report to be over so the market can trade the real issues: demand, new crop prospects and fund interest in rebuilding long positions.  Fund rebalancing starts today on the close and will conclude in 5 days. Analysts are expecting index funds to buy 50,000 soymeal, 20,000 KC wheat while selling 60,000 Chicago wheat, 35,000 beans and 10,000 corn contracts on or near the close over this period. Weather conditions in South America remain favorable. We see the potential for further short covering going into Friday’s 12:00 noon Eastern Time report release. However negative chart signals may provide resistance to rally. Livestock futures are struggling with index fund rebalancing and the Goldman Roll. Cash cattle trade is still waiting to develop. Boxed beef was mixed on Monday. Choice was down .77 and select was up .38. Cash hogs are starting the week lower as supplies are plentiful after last week’s cold weather hampered movement. Pork cutout was up .22. If you are in the DeKalb, IL area tomorrow, I will be giving a Pre-USDA Report outlook at the Northern IL Farm Show at 10:00 am. Look forward to seeing you there.
Markets as of 4:45 AM
  • Mar Corn    + 1/2
  • Jan Beans   -5 3/4
  • Mar Wheat   +2
  • Feb Cattle  -.17
  • Feb Hogs    +.42
  • Mar Dlr     -.07
  • Mar S&P     -1.25
  • Jan Crude   +.24
  • Feb Gold    +7.30
Contact Allendale: 800-262-7538

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