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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.

EU Headlines Drive Market

Nov 07, 2011

Good Morning! Paul Georgy with early morning comments for November 7, 2011 at 5:15 am. This morning the macro markets are again grabbing the headlines to influence the trades’ decision making. The Greek Prime Minister has agreed to step down and setup an interim government until January elections can be held. It also is anticipated that the new government will have enough votes to accept the EU plan. There was rumor over the weekend that the EU will stop buying Italian bonds until the country makes some policy changes. The CME has lowered margin requirements on initial margins to maintenance margin levels. This was done to help the firms who accepted MF Global accounts which received only a portion of the money from customers’ segregated accounts. Grain fundamentals remain bearish as demand seems to have dried up and world crops are getting bigger. Moisture is falling in the southern plains and South America is getting the spring rains which get a crop off to a good start. We expect to see choppy markets ahead of the USDA November Supply and Demand Report Wednesday morning. The trade average is 147.7 bpa for corn yield and 41.4 bpa for a bean yield. The USDA estimates last month were 148.1 corn and 41.5 soybeans. The livestock futures are expected to open steady lower as the stock markets could influence trader attitude early in the session.
Markets as of 5:15AM
Corn—0 to 1 lower             Beans—1 to 3 lower
Wheat— 1 to 2 higher
Live Cattle—Called steady lower           Lean Hogs— Called steady lower
Dollar— .03 higher                                    Crude—.20 higher
Gold— 12.60 higher

Allendale Advanced Charts
Beans backed off from the down trend resistance line on Friday. Initial support crosses at the 62% retracement level of 12.09 ¾. Then support would be last week’s low of 11.90. The short and long term trends are down in Jan beans.

Nelson Notes from desk of Rich Nelson
The Bureau of Labor Statistics reported October job growth totaled 80,000. That was less than the 95,000 increase expected. However, the government made positive revisions to previous data. September job growth was revised from 103,000 up to 158,000. August job growth was revised from 57,000 to 104,000. With positive revisions to previous data, this report will be considered neutral. 

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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