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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.

Economic Data Releases May Influence Grain Prices

Aug 01, 2012


Good Morning! Paul Georgy with early morning comments for August 1, 2012 at 5:15 am. Grain futures are lower on profit taking. The weather models reduced some of the rain which was put into the forecast on yesterday’s noon runs. The macro markets are being watched closely today as the FOMC meeting minutes will be released this afternoon. Trade is looking for possible QE3 announcement. The European Central Bank will be meeting on Thursday. We have more economic data coming out later this week. The demand for corn at the gulf has dried up due to a $35 to $40 Brazilian corn discount. It was pointed out to me yesterday that corn is showing signs of mature bull market. It is making new highs on decreasing volume and decreasing open interest. Watch for a change to that pattern. There are some market watchers who are becoming adamantly bullish with yield projections far below the average estimates and price projections are off the charts. Time will tell who is right. One must remember there has to be a buyer for high priced corn and that corn yields are stabilizing or improving in areas where they received rain. Corn is being harvested already in areas where there is extreme drought. Sometimes we have to be reminded that we must make decisions based on our operation and only we can control the risk and profitability. We suggest looking at ways to lock in crop insurance payments, talk to your Allendale Representative. Beef demand should improve as we move into August. Seasonals are suggesting we may be seeing a low in the product where it should provide some support to fed cattle. Boxed beef was higher on Tuesday. Choice was up .20 and select was up .31. Cash cattle are at a standstill so far this week. Pork cutouts were unchanged on Tuesday. Lean Hog futures are being pushed around by funds and weak cash markets.
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Markets as of 5:15 AM
Dec Corn    -7 3/4
Nov Beans   -9 1/2
Sep Wheat   -17 3/4
Aug Cattle +.02
Aug Hogs    -.02
Sep S&P     +5.00
Sep Dlr     -.02
Sep Crude   +.10
Aug Gold    +1.40
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Allendale Advanced Charts
Yesterday’s trade found the Dec Wheat on the defensive. Technically, we did not do enough damage to the chart to indicate a change in trend; however we are clearly losing momentum to the upside. I am looking for a close below the 7/24 pivot low of $8.64 ¼ to indicate a peak and reversal set up…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Over the next 6-10 days we need to see better precip than we have. Today’s chart shows us that the forecast is for normal to above normal rainfall and slightly above normal temps for a good portion of the growing region. This should help the bean crop moving forward if we can see some shower activity develop
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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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