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The Allendale Wake-Up Call

RSS By: Paul Georgy, AgWeb.com

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.
 

South American Weather Concerns

Jan 22, 2013

Good Morning! Paul Georgy with early morning comments for January 22, 2013 at 5:00 am. Grain futures are higher in a quiet session overnight. The inauguration and the MLK holiday is now over and the government will have to get down to business as the debt ceiling is near. Grain traders will be keeping one eye on politics but focused on South American weather. Argentina received a little less rain than was forecast this weekend. Not much is expected in the 10 day forecast with temps staying relatively cool with a few days of flare-up. We will likely begin to see some reduction in production out of Argentina if this weather pattern continues. Export sale are likely not going to reach USDA’s latest target unless demand changes soon. Lack of farmer selling is keeping basis strong and we are hearing more talk of ethanol plants slowing production. There likely will be more plant closing announcements very soon. The CFTC report showed funds back buying corn last week as they increased longs by 26,736 contracts. They also increased longs in soybeans by 6,184 contracts. Open interest has increased sharply in grains since the USDA report. Last week’s sharp rally has technical indicators showing overbought conditions. Look for more volatility this week. Cattle futures fell on liquidation and news of Cargill closing a TX plant. Cattle and feeder cattle contracts at CME are oversold technically. The weakness in cattle is weighing on lean hog futures. We suggest caution in picking a bottom in livestock, use proper risk protection. Boxed beef was sharply lower on Friday. Choice was down 2.36 and select was down 1.75. Pork cutout value was down .25. Allendale’s 25th Ag Leaders Conference is Friday and Saturday, tickets are still available.
 
Markets as of 5:00 AM
  • Mar Corn    +6 1/4
  • Mar Beans   +17 1/4
  • Mar Wheat   +6 1/2
  • Feb Cattle  Steady-Lower
  • Feb Hogs    Steady-Lower
  • Mar Dlr     -.25
  • Mar S&P     +1.75
  • Jan Crude   -.02
  • Feb Gold    +5.30
 
Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

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