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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.
 

Traders Adjust Positions Ahead Of Sequestration

Feb 27, 2013

Good Morning! Paul Georgy with early morning comments for February 27, 2013 at 5:05 am. Grains are mixed with corn lower and #soybeans and # wheat higher. This morning we are seeing some adjusting in the old crop/new crop corn spread as farmers are reluctant to sell. Farmers were telling me at recent meeting they will be more likely to sell if nearby corn futures reaches 7.50. Spreads are being supported as trade believes there will be very little corn delivered, if any. First notice day for March grain contracts is tomorrow. Those holding long March positions on Thursday will have the risk of taking delivery. We are only a few days away from establishing the crop insurance price for corn. Unless we see a sharp rally in Dec #corn the average price will be around 5.66 compared to last year's 5.68. Talk of #China opening their reserves of soybeans and soyoil is weighing on the soy complex. The price relationship of wheat to corn may cause greater use of wheat in rations. Funds bought an estimated 11,000 corn contracts and 4,000 wheat contracts. They sold an estimated 4,000 soybeans. The sequestration which takes effect March 1 has traders very nervous. Washington continues to point fingers. The packing industry meat inspectors appear to be working on a furlough program that is expected to ease the pain. It is likely to back cattle up but may cleanup some meat inventory and improve packer margins. Cash cattle should trade higher this week. Boxed beef was higher due to snow storm disrupting movement of product. Retailers also want to get some meat on hand ahead of possible supply problems due to budget cuts. Choice was up 1.42 and select was up 2.43. Pork cutout values were down .26. The feeder cattle index was down .83 to 138.31. Looking forward to seeing many of you in Riverside IA on Thursday Afternoon or Friday Morning. We had a great crowd last night on the February Ag Leaders Webinar. Don’t forget to fill out the Planted acreage survey at www.allendale-inc.com.

Markets as of 5:05 AM

  • May Corn    -1
  • May Beans   +3 1/2
  • May Wheat   +3 1/4
  • Apr Cattle  +.02
  • Apr Hogs    -.27
  • Mar Dlr     -.17
  • Mar S&P     +.75
  • Apr Crude   +.27
  • Apr Gold    -8.00

Contact Allendale: 800-262-7538 service@allendale-inc.com www.allendale-inc.com

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