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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.
 

European Central Bank Dumps More Cheap Money into System

Feb 29, 2012

 

Good Morning! Paul Georgy with early morning comments for February 29, 2012 at 5:15 am. Grain markets are slightly higher this morning. The strong cash markets, smaller South American production and the talk of inflation have grain markets setting new highs. Gulf basis was higher yesterday as producers are not willing to let go of old crop soybeans. The continuous lowering of estimates of Brazilian and Argentine soybean production has finally convinced traders that maybe they should be concerned. Money flows coming in on the buy side as traders try to get ahead of the second part of the Long Term Refinancing Operation by the European Central Bank (ECB) has impact on commodities. The ECB dumped 530 million Euros into the system this morning which was in line with trade expectations. Traders will be watching Fed Chairman Ben Bernanke’s Humphrey Hawkins testimony today. It is expected he will make sure the market is aware further monetary adjustments will be made if necessary. The injection of monies by EU or US is fueling the inflation card again. On Thursday the International Swaps and Derivative Association will rule if Greece defaulted due to the ECB’s special bond swap with Greece. Wholesale beef values closed at record highs again on Tuesday. Choice was up .09 and select was up .69. There were a few cattle traded in the south at 128.00 which would be steady with last Friday. The weaker dollar is supporting the idea of improving exports of pork and beef. You can help by participating in the Annual Allendale Planted Acreage Survey just click here.
 
Markets as of 5:15 AM
Corn    +1 to +2                      Live Cattle     +35 to +90                  US Dollar Index         -.01
Beans +1 to +3                      Lean Hogs      -05 to +20                   Crude Oil                    +32
Wheat +3 to +5                     S&P Index      +1.25                           Gold                            -3.38
 
Allendale Advanced Charts
May beans have closed for the second time above the 50% retracement level which puts next resistance at 13.34 area. The 12.92 area should provide initial support.

 
Nelson Notes from the desk of Rich Nelson
US: Over the past few weeks July soybeans have advanced faster than November. Private analysts have suggested big old crop soybean stocks would get even bigger for the new crop. USDA’s AgForum conference suggested the opposite, that big old crop stocks would actual decline a good deal. Will the market reconsider this spread?
 
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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