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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 Sparks Rally

Dec 19, 2011

Good Morning! Paul Georgy with early morning comments for December 19, 2011 at 5:15 am. Grain markets are firmer as weather concerns out of South America intensify. Drew Lerner from World Weather Inc has the following comments, "Almost all of Argentina’s summer grain and oilseed production region is enduring one level or another of stress. Early season yield potentials may be sliding lower and if rain late Tuesday and Wednesday of this week fails to be generalized the situation may go from bad to worse when dry weather resumes. However, the odds are good that at least some rain will fall in the majority of crop areas this week and a follow up event "may" occur during mid-week next week to slow the decline in crop and production potentials." If you want your weather questions answered by Drew, attend the Allendale Conference in January. The death of the North Korean leader adds uncertainty to world markets in a week where traders likely will want to reduce risk. The EU leaders are promising to work through Christmas in hopes of finding a solution for the debt crisis. Rich Nelson, Director of Research at Allendale has posted these comments about the Cattle on Feed Report released on Friday in the Allendale Research Center. "Negative news was seen on all sides. The Cattle on Feed report indicated Placements +4.1% over last year’s November. That was more than the 0.4% decline that was expected. Since November Placements of new calves and feeders will be marketed as fat cattle between April and August, this is bearish for the summer contracts. Marketing’s of cattle already finished in November were 0.2% lower than last year. That was higher than estimates of a 1.5% decline. More cattle leaving feedlots than expected last month means fewer available right now which is neutral to slightly supportive the nearby contract. The total feedlot population, Cattle on Feed, is now 4.0% larger than last year." Cash cattle traded actively at $118 on Friday. That was down $2 from last week. Choice and select beef were .91 and .98 higher on Friday. Pork cutouts fell 1.48 on Friday; expect a lower opening this morning. Stay in touch with Allendale Research Center as we approach 2012.
 
Markets as of 5:15AM
Corn: 8 to 9 higher               Beans: 13 to 15 higher                     Wheat: 5 to 7 higher
Live Cattle: expect lower opening                           Lean Hogs: steady to lower opening
Dollar: .01 lower                    Crude: .30 higher                  Gold: .09 lower
 
Allendale Advanced Charts
Hogs have come under pressure the past few sessions and have continued to hold a sharp downtrend. We have also broke most major support levels. The next area to look at will be 80.97. Look to continue to sell this market on rallies until we see a key reversal.

Nelson Notesfrom the desk of Rich Nelson

The Buenos Aires Grains Exchange has raised its estimate of the current wheat harvest from 13.0 to 13.6 million tonnes. Harvest will last into January. For comparison, the Rosario Grains Exchange sees the crop at 12.8 mmt while USDA is up at 14.5.

Contact Allendale: 800-262-7538 research@allendale-inc.comwww.allendale-inc.com

 

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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