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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.

Traders Dig In Heels Going Into USDA Report

Aug 07, 2012

Good Morning! Paul Georgy with early morning comments for August 7, 2012 at 5:15 am. Grain futures are higher in a narrow range session. Traders are watching headlines for direction as we near the August Supply and Demand Report. Weathermen have put some crop stress relief in the forecast for later this week by adding rain and cooler temps. Yesterday afternoon the USDA released the weekly crop conditions which put the G/E at 23% for corn and kept beans the same as last week, 29%. Some key takeaways from this report is that 0% of the corn in IL and IN is excellent and the poor to very poor category increased by 2% nationwide. Next week it is possible to see soybean conditions improve from the weekend rains and cooler temps. Grain traders are looking for the yields to drop on Friday’s S/D report which, in turn, could drop production to 1.7-2.0 billion bushels. We would advise that it is likely the USDA could reduce demand by 72% which could put ending stocks in the700 million range. The soybeans have a much more complex picture. Chart watchers are looking for a second close below the 20 day moving average in November soybeans to signal a reason for selling. Corn remains in a narrow trading range on the charts which could add to the volatility on Friday morning. The macro markets continue to talk about the Euro getting their act together and the possibility of QE3 in the US. Livestock markets are being hit with news of breeding stock going to market. This is creating concern about burdensome meat supplies near-term but could create shorter supplies in 2013. Boxed beef prices were higher on Monday with choice up .35 and select up .77. Pork cutout values were up 1.10. Look for Ag markets to be choppy going into Friday’s report.
Markets as of 5:15 AM
Dec Corn    +3 1/2
Nov Beans   +13
Sep Wheat   +2 1/4
Aug Cattle -.27
Aug Hogs    +.87
Sep S&P     +1.00
Sep Dlr     -.07
Sep Crude   +.06
Aug Gold    -.20
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Allendale Advanced Charts
Yesterday opened below the 20day moving average which the Nov. Beans have held the last two times we touched it. The market did not violate the uptrend line but this is the tightest close to the trend line in six weeks . A close below the $15.36 7/25 low would require defensive priced measures for producers.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Weekend rains ran 0.20 to 0.80 inch with widespread 85% coverage. Rains are seen again for the Cornbelt on Wednesday with another 0.20 to 0.80 inch system.
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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