Looking Ahead to USDA Forecast
Feb 21, 2012
Good Morning! Paul Georgy with early morning comments for February 21, 2012 at 5:00 am.
Grain markets are mixed as spreading dominates trade. I had the opportunity to attend RJ O’Brien’s "Exchange of Ideas" on a cruise ship this past weekend. We heard several commodity industry leading analysts prognosticate the markets. They analyzed the fundamental aspects of the commodity markets but in summarizing they felt the agricultural markets will be greatly influenced by government involvement and government policy. Money flow of large speculative players will also have to be monitored closely. Stay close to Allendale’s Research. We will be conducting our annual planted acreage survey on March 1 through March 9. South America received good rains this weekend which should be beneficial to the late crops in Argentina and Brazil. The Greek debt situation inches closer to a solution which could prevent a default. The Iranian tension continues to mount and is causing traders to buy Brent crude. The USDA Outlook Forum will be held Thursday and Friday of this week. Expect to see new crop corn find selling interest on any rallies. Watch news headlines for a leak of USDA estimates before official presentation. Feedlots won the stand-off last week with packers. On Friday, packers came out bidding and had to pay several dollars higher. The strength in futures helped support this run, however we are expecting some profit taking early this week. The beef cutout value closed out the last week with higher prices. Choice was up 1.36 and select jumped 2.48. Pork cutouts were down .41 to 86.48. The April contract of hogs has resistance at 90.75 level. Sign up today and reserve your free seat for our Allendale 2012 Road Series
meeting in Carrington, ND
and Riverside IA
Markets as of 5:00 AM
Corn -3 to -5 Live Cattle steady US Dollar Index -.25
Beans +3 to +5 Lean Hogs steady Crude Oil +1.35
Wheat -3 to -5 S&P Index +2.00 Gold +13.40
Allendale Advanced Charts
Spring wheat traded above the 50 day moving average on Friday, but was unable to close there. This may be a selling opportunity as the trend is still down. However a close above the 50 day would suggest a retest of the downtrend line in red.
Nelson Notes from the desk of Rich Nelson
The National Oilseed Processors Association reports January soybean crush at 142.813 million bushels. This was a little less than expectations of 144.5 million and may be considered a little disappointing. Though the year to date (Sep – Jan) marketing year total is down 4.9% versus last year we will point out January levels were only 1% smaller. Crush needs to run equal with last year from February to August to meet USDA expectations.
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.