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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.

Greek Debt Deal Deadline Cools Commodities

Feb 10, 2012

Good Morning! Paul Georgy with early morning comments for February 10, 2012 at 5:20 am. Follow through selling has grain futures lower this morning. The Greece debt deal was not approved by EU finance ministers but the deadline for further changes was moved to Feb15th meeting. Commodity futures selloff as investor euphoria wanes. Corn and soybean markets post a new high for the move and close near lows on Thursday. This occurred after a neutral to a touch friendly USDA report. What should that tell us? We believe that the buyers were hoping for better news from USDA and it seems now that the crop losses in South America have been priced into the US futures. We are watching three factors for the next few weeks. The Macro situation with the Eurozone and Greece debt will be ongoing and have day to day influences on our markets. The cash market will be monitored closely in corn and soybeans and will likely provide support to nearby futures. Producers will be strong holders and not sell on weakness in futures unless basis improves. The third factor is the potential planted acres of corn and soybeans. The USDA will give us a glimpse of their thoughts on Feb 23 and 24th when they hold the USDA Outlook Conference in Washington. This will not be an official number but an estimate by their economist. Allendale will be doing our annual Planted Acreage Survey on March 1 through March 9. We will release the survey results the following week, well before the USDA gives us the Prospective Plantings numbers on March 31. The weather in Ukraine and south Brazil will be monitored but likely not a market mover for now. Subscribe today to the Allendale Research Center for a special low price of $250 for 13 months or call 800-262-7538 and get the full details. The cattle trade is confusing and difficult to justify by fundamental news. Packer margins are in the red, feedlot closeouts are showing losses and retail margins are ugly. Even with a slowdown in production by packers they struggle moving beef at current levels. Choice beef was down .24 and select was up .84 on Thursday. Pork should be gaining demand for high priced beef but pork cutouts were down .23. We invite you to join us on the Allendale 2012 Road Series. Meet us in Carrington ND on February 24, 2012 for more info and free signup click HERE. We have also just scheduled a meeting in Riverside IA on March 6 details click HERE.
Markets as of 5:20AM
Corn   -3 to -4                        Live Cattle     -20 to -30                    US Dollar Index        +.15
Beans -7 to -9                                    Lean Hogs      -10 to -15                    Crude Oil                   -1.08
Wheat -8 to -9                        S&P Index     -7.50                            Gold                            -16.00
Allendale Advanced Charts
Beans were able to take out some key resistance at 12.46 ¼ on Thursday, but like corn it couldn’t hold on to the strength. Reistance still remains at 12.47 area and support crosses at the 100 day moving average at 12.05 level.
Nelson Notes from the desk of Rich Nelson
US ending stocks fell from 846 to 801 million bushels which was near expectations of 791.
Contact Allendale: 800-262-7538
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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