Sep 23, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin

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.

Grain Data Cools Optimism for Livestock Producers

Oct 12, 2012

Good morning! Paul Georgy here with early morning comments for Oct. 12, 2012, at 5:10 am. Grains are lower on profit taking after yesterday’s bullish reaction. The USDA served up data yesterday for both sides of the line. The statistics branch increased planted acres and harvested acres by more than trade was expecting. The USDA put the harvested acre percentage at 90.5% when the trade was expecting 88%. We would expect further adjustments in harvested acres as we go forward. On the demand side, we did not see much change except in the exports and the beginning stocks. As prices move higher, we are likely to see more consumption cuts in upcoming reports. Soybean data was in line with trade expectations. Cash markets will dictate movement. It will likely take a rally to entice farmers to open bin doors going into the end of year.

Now that the USDA data has been released, traders will be focusing on macroeconomic issues and weather in South America. The tight US supplies of corn and soybeans will make weather in the Southern Hemisphere a market mover as we go through their growing season. Weakening of a key El Niño feature has the Australian Bureau of Meteorology already saying that the odds of an El Niño occurring have diminished considerably. The lack of an El Niño could raise the odds of adverse growing conditions in South America. Chinese and European financial instability will shape traders' confidence (especially funds).

Technical traders now have a reason to be optimistic in corn. Can Dec corn close above the 7.68 level for the week? This could suggest a seasonal low has been made. November soybeans have consolidated this week but have more work to do to suggest the seasonal low is in. Export sales estimates for this morning’s report are: corn 300 to 400 tmt, soybeans 750 to 850 tmt and wheat 350 to 550 tmt. Livestock producers have been thrown another curveball, as higher feed cost means larger losses. The fourth quarter of 2012 has sizeable losses projected for hog producers. Bear spreads in lean hog futures are telling the story. Choice beef was up 0.33 and Select up 0.40. Pork cutout value was up 1.04 on Thursday.

Markets as of 5:10 AM
Dec Corn    -4
Nov Beans   -13 1/4
Dec Wheat   -6 1/2
Dec Cattle -.02
Dec Hogs    +.25
Dec Dlr     -.19
Dec S+P     +2.75
Nov Crude   -.16
Dec Gold    -.90
Need more:
Contact us directly view email:
Allendale Advanced Charts
Yesterday Dec Live Cattle suffered a short term loss of bullish momentum that likely tips the odds that we make a push for the 9/27 pivot low of $123.95. A close below the pivot low would reconfirm the downtrend…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
With lower beginning stocks, almost no change to production, and only a moderate adjustment to exports, USDA lowered ending stocks from 733 million to 619. That was lower than the average guess of 648. That ending stock number would imply a move to $8.00 on December corn. We don’t believe it will happen but that is what the numbers would suggest.
Contact Allendale: 800-262-7538
This material has been prepared by a sales or trading employee or agent of Allendale Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Allendale Inc.’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Allendale Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.


Log In or Sign Up to comment


No comments have been posted, be the first one to comment.
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by|Site Map|Privacy Policy|Terms & Conditions