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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.

Dollar Down, Grains Higher

Oct 04, 2012

Good Morning! Paul Georgy with early morning comments for October 4, 2012 at 5:10 am. Grains are higher as the Euro firms against the US dollar. China is on holiday for the balance of the week. Traders are looking ahead to next Thursday’s USDA Crop Production and S&D data. Many are concerned the USDA will jump up the soybean production. Another analyst estimate will be released on Friday. Yield results from our clients and producers find them pleasantly surprised with their bean harvest returns. Weekly export sales numbers will be released at 7:30 this morning. Trade average estimates are for corn 200 to 400 tmt, soybeans 700 to 900 tmt, meal 155 to 300 tmt, bean oil 5 to 20 tmt and wheat 400 to 600 tmt. Demand has slowed down considerably in exports over recent weeks. Now domestic usage decline is being confirmed with the ethanol demand data released yesterday a full 9% less than same period a year ago. Rich Nelson has been discussing the potential changes the USDA could make on next week’s report in the Allendale Advisory Report. To give a brief summary, he is looking for a potential increase in yield with a drop in harvested acres. This could lead to a potential lower total production of corn. Technical traders seem to be moving prices in grains which is causing some of the choppiness as harvest is wrapping up in many areas. Weather conditions in South America haave improved for soybean production but there still remains a long growing season ahead and any disturbance to a perfect season will create volatility. Livestock traders like the idea of cheaper grain prices but struggle with finding positive margins in 4th quarter. Cash market interest for cattle is quiet. Boxed beef was firmer on Wednesday with choice up .21 and select up .77. Pork cutout values were down .79 after the sharp increase on Tuesday. Thank you, Steve for a great job while I was in Germany the last few weeks. Stay in touch with Allendale Advisory on the web.
Markets as of 5:10 AM
Dec Corn    +4 1/2
Nov Beans   +12
Dec Wheat   +3
Oct Cattle -.70
Oct Hogs    -.07
Dec Dlr     -.25
Sep S+P     +5.00
Nov Crude   +.61
Dec Gold    +11.10
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Allendale Advanced Charts
Yesterday Nov Crude Oil had a decisive move to the downside; taking out the 9/26 $88.95 pivot low in the process. This move reinstates the downtrend and does open up the possibility for a move to the $78.88 low…Frank La Placa 
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Financial market participants are dialing down their expectations for China’s economic growth. A portfolio manager for DoubleLine Capital LC indicated, "The big bull period for China is behind us. We won’t see double digit growth rates again." This also has implications for outside money’s view of commodity demand (soybeans) valid or not.
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