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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.

Grain Settlements Today Will Provide Important Clues

Sep 14, 2012

Good Morning! Paul Georgy with early morning comments for September 14, 2012 at 5:10 am. Grain futures are higher on short covering and optimism from Fed policy changes. The Fed announced the QE3 plan where they will buy $40 billion per month of mortgage backed securities while continuing with operation twist where they buy $45 billion of long dated bonds. This plan is expected to increase the velocity of money and potentially create jobs. The action taken by ECB’s Draghi and the approval by the German Constitutional court has given traders confidence in the stability of world economies. There still remains the problem that China’s economy is slowing down and we are past peak travel season in the US. Today’s trading action and more specifically  the close should provide some indication of next week’s trend. If corn closes below the 50 day moving average of 7.88, it would be the first time since June 18. This could be the 1st weekly close breaking the uptrend. Soybeans spreads are starting to signal that they are running out of steam in the nearby contracts as they lose to the deferred. Wheat remains the leader in the grain complex as Egypt continues to buy, weather remains dry in Australia and the European crop data downgrades provide support. The grains are looking for reasons to break or rally. Stay in touch with Allendale Advisory for the details. Cash cattle traded at 126 to 128 which are 1 to 3 higher compared to last week. Boxed beef was mixed again on Thursday with choice -.31 and select +.25. Pork cutout values were +.02. Cash hogs traded higher on Thursday. The aggressive marketing the past 6 weeks is now turning into tighter supplies.
Markets as of 5:10 AM
Dec Corn    +7 1/2
Nov Beans   +12 3/4
Dec Wheat   +16 1/4
Oct Cattle +.15
Oct Hogs    -.32
Sep Dlr     -.29
Sep S+P     +6.75
Oct Crude   +1.87
Dec Gold    +5.70
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Allendale Advanced Charts
Yesterday the Dec U.S. Dollar has continued its slide to new contract lows. With no levels of technical support, continued pressure should continue. All exposure to this market should be bearish in nature until this market shows some type of strength, preferably above the 9/10 high of $80.59.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The Fed announced their plan to enact QE3 yesterday. This latest move will buy $40 billion in mortgage securities each month thru the end of the year. They will keep interest rates low thru mid 2015 (previously thru 2014)
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