The New Year Gives Opportunity to Cash In on Corn
Jan 04, 2012
Good Morning! Paul Georgy with early morning comments for January 4, 2012 at 5:20 am. Grain futures set back overnight after rally on Tuesday. The New Year started out with a buying frenzy due to macro events and lack of rain in Argentina. The risk-on attitude by investors and funds was supported by good economic data from China, Europe and the US. Brazil seems to have adequate rainfall through the majority of the growing area. Argentina is dry and temps are in the upper 90’s to low 100’s. Crop deterioration is definitely happening. The last USDA yield estimate was 121.6 for the region. Last year they produced 99.6 bushels per acre. We believe there will be a decline from the 29 MMT the USDA had forecast last month. The USDA January supply and demand report which will be released next Thursday morning is sure to create more volatility in the grain markets. In the last 5 years, the average move from the close the day before to the close the day after this report was greater than 20 cents for corn. Farmers are using this rally as a reason to make cash sales in a new tax year. Choice beef was down .65 and select was up .75 on Tuesday. Beef prices have improved as the short kill weeks have tighten supplies. We expect some pressure on beef as we get to the end of this week. Normal hours should produce greater inventory. Pork cutout improved slightly on Tuesday. Strength in commodity prices will need support from outside markets as we start 2012. Get the fact you need to make solid decision in 2012 by attending the Allendale Leaders Conference on Jan 20 an 21st
in Crystal Lake IL. Go to www.allendale-inc.com
Markets as of 5:20 AM
Corn: 1 to 2 lower Beans: 1 to 3 lower Wheat:3 to 5 lower
Live Cattle: 10 to 20 lower Lean Hogs: 20 to 30 higher
Dollar: .23 higher Crude: .50 lower Gold: 2.30 higher
Allendale Advanced Charts
Beans gapped higher on Tuesday and now have 3 gaps on the chart. The first gap in mid-December does not meet the criteria of a breakaway gap. It could be however, since we are not working in an exact science. If beans extend the rally in the next few days with out filling recent gap the stage is set for a move to 12.90 area.
Nelson Notesfrom the desk of Rich Nelson
A survey at the annual Beltwide Cotton conference found producers intend to plant 12 to 13.5 million acres. That would be down sharply from last year’s 14.72 million acre level. It is almost equal to 2010’s 10.97 level. Well known cotton analyst, Carl Anderson formerly of Texas A&M, told Reuters newswire 85 cent cotton cannot compete with corn and soybeans.
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.