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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.

Tuesday’s Weak Close in Beans Concerns Bulls

Jul 25, 2012

Good Morning! Paul Georgy with early morning comments for July 25, 2012 at 5:10 am. Grain futures are higher this morning after a very choppy overnight session. Thanks to the Allendale staff who worked so hard to put together the Ag Leader Webinar last evening. Thanks to all who took the time to listen to this important presentation live. The spotlight on the weather market is dimming as forecasts put moisture across the Midwest through this weekend. Although amounts are not enough to replenish soil, it should reduce crop stress. The futures market is now focused on the key reversal chart pattern in soybeans and corn on Monday. Tuesday’s second day of a sharp selloff in soybeans has funds and specs running for cover. The macro market has raised its head again with headlines out of the EU that are less than supportive to a stable world economy. However the dollar is weaker on positive economic data out of England and Japan. The demand for corn and beans are showing the effect of high prices. Corn basis continues to slide as the world’s largest pork producer said yesterday they will import corn from Brazil. Some comments from the wheat scouts in SD are finding wheat fields harvested already. And those fields left to harvest are showing good quality and many are ripe. The extremely large long fund position in soybeans seems to be a factor in the recent selloff. Technical analysts are now pointing to the chart gap left on July 5th as key support area. Boxed beef values were mixed today with choice down .53 and select up .66. Last week’s beef production, at 518 million lbs. was the biggest of the year so far. Through most of this summer, production had been running 1% lower than last year. Though we do not have our hands on actual cow slaughter data, we would say there is an extra hoof or two in that mix due to cow liquidation. Pork cutout values were 1.57 higher on Tuesday.
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Markets as of 5:10 AM
Dec Corn    +7
Nov Beans   +1 3/4
Sep Wheat   +8 1/4
Aug Cattle -.37
Aug Hogs    +.45
Sep S&P     +3.75
Sep Dlr     -.27
Sep Crude   +.13
Aug Gold    +12.20
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Allendale Advanced Charts
Yesterday’s lower day in Dec Wheat has not established a close low enough to threaten the bull market. A close below $8.50 which is old resistance now turned support would be a failure in a scale sufficient to negate the bull trend.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The worst of the summer drought may be over. That is the headline the GFS(American) model may have indicated Monday.
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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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