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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.

Headlines, Macroeconomic Developments and Money Flow

Dec 06, 2011


Headlines, Macroeconomic Developments and Money Flow
Good Morning! Paul Georgy with early morning comments for December 6, 2011 at 5:20 am. Grain futures see another round of liquidation overnight taking out recent lows. Headlines, macroeconomic developments and money flow seem to have control of traders’ bias. We expect to hear ideas and agreements coming out of EU for the next few days as we approach the EU leaders Summit on Dec 9. All 27 nations are expected to be present with the hope to ratify new policy that will save the Eurozone. Meanwhile more negative news has hit the market when S&P put 6 major nations of the EU on a downgrade watch from AAA rating. Money flow appears that it may be the focus until the New Year arrives. The fundamental traders are waiting for China to arrive and buy our corn and soybeans. Price is suggesting that Argentina’s corn is currently more competitively priced. The USDA monthly supply and demand report due to be released on Friday will likely have no changes in production. However the demand side could have significant adjustments. Allendale expects corn ending stock could rise to over 900 mb and soybeans ending stocks could come in at 230 mb. That would be an increase of 35 mb form last month. Those areas in Brazil which had started to show some moisture stress should get covered with rain this week. Cattle futures sold off sharply on Monday as cutout values for choice was .83 lower and select was .71 lower. Cash markets are trying to hold the line at steady this week. Hog futures closed for the second day below key support. Pork cutout values were higher on Monday posting a plus .32. If you are going to be in the Albert Lea MN area on Wednesday come join us at the Farmers State Bank 2011 Agriculture Seminar Details can be found at Call with your reservation at 507-863-2371.
Markets as of 5:20AM
Corn: 7 to 10 lower             Beans: 1 to 3 lower              Wheat: 5 to 8 lower
Live Cattle: 15 to 20 lower                          Lean Hogs: 20 to 30 lower
Dollar: .07 lower                    Crude: .01 higher                  Gold: 11.00 lower
Earn a chance to win an iPad2 if you register by the end of Dec 7th.
Allendale Advanced Charts
February hog futures saw another sharp break on Monday after the markets took out the 62% retracement at 88.94. it now appears it is headed towards the long-term uptrend near 88.00. Be careful about picking bottoms in this market. See trade recommendation in Allendale Advance Charts.

Nelson Notes from the desk of Rich Nelson
Rains directly during harvest season in Eastern Australia could harm quality. Just like last year, this could mean an abundance of feed quality wheat versus higher grading milling. Asian grain traders suggest this additional feed quality product could further pressure corn prices in the feed grain market.

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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