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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.

Risk-Off Attitude Dominates Overnight Trade

Feb 27, 2012


Good Morning! Paul Georgy with early morning comments for Feb. 27, 2012, at 5:10 a.m. Grain futures are lower as outside markets retrace some of recent rallies. Thank you to the Melvin family for their hospitality. We had a great group of producers attend the meeting in Carrington, N.D. We asked those in attendance to fill out a survey on what they expect to plant this year compared to last year. The results may surprise you. They plan on switching approximately one-third of the spring wheat acres to corn in 2012. The bottom line is that 100 bu./acre corn will return more than an average-to-good crop of wheat. There was very little snow cover in North Dakota, which should limit any spring flooding. The Allendale Annual Planting Survey begins this week. We need your help, please go to the website and fill out the survey. The March options expired on Friday with 3,478 640 calls abandoned and 130 640 puts exercised. Brazil weather forecast is for more rain over the next five days. These rains should help double-crop soybeans and winter corn. The Syrian and Iranian situation will continue to dominate traders’ bias in the crude oil markets. The euro financial crisis has been silenced with the funding of Greece. However, we expect more problems to develop as the Greek election nears and Portugal debt payments become due. At the G20 meeting over the weekend, officials agree more money will be needed as the PIIGS crisis is far from over. The livestock market received a neutral to bullish Cattle on Feed report on Friday. On feed 102, placed 98 and markets 102; with these numbers we would expect a steady to higher opening. Cutout values for beef and pork were up slightly on Friday afternoon. There is still space at the meeting in Riverside, Iowa, on March 6, reserve your seat by clicking here.
Markets as of 5:10 AM
Corn    -3 to -5                        Live Cattle     steady higher              US Dollar Index         +.21
Beans -1 to -2                        Lean Hogs      steady lower               Crude Oil                    -1.30
Wheat -4 to -5                       S&P Index      -7.00                            Gold                            -10.3
Allendale Advanced Charts
May corn continues to trade in the wedge formation. The rule of thumb is the further it moves into the formation the chance of a significant breakout. That could be the case here as the market is content to trade sideways near moving averages.
Nelson Notes from the desk of Rich Nelson
The monthly Cattle on Feed report was slightly supportive. USDA’s survey of feedlots indicated Marketing’s (finished cattle leaving feedlots) were 2.4% larger than last year in January. That was better than the 0.3% estimate. Placements of new calves and feeders into feedlots were 2.2% smaller than last year. This was just under the 1.2% decline that was expected. 
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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