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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.

USDA Projections, Exports and Money Flow

Feb 24, 2012


Good Morning! Steve Georgy with early morning comments for February 24, 2012 at 5:10 am. Grains are pushing lower this morning as traders continue to dissect the numbers USDA released at their outlook conference. USDA’s chief economist said yesterday in a meeting that US farmers will plant the largest corn crop since 1944. He also said most field crops could be facing growing supplies that will drive down price. This news could keep some pressure in the corn and limit rallies for new crop. Beans have been strong this week due to weather concerns once again in South America. This continues to be friendly because traders believe that export sales will remain strong for US beans. Argentina’s Rosario Grain Exchange lowered production estimates yesterday for Argentina down to 44.5 million tonnes. That is down from 49.5 last month. As long as these worries continue we could see beans find support for now. USDA raised wheat planted acres and we are continuing to see pressure this morning from that news. Export sales will be out at 7:30 and traders are expected to see wheat sales between 500,000 and 900,000 tonnes. Corn estimates are between 800,000 and 1.2 million tonnes and traders are looking at beans to range from 3.5 million to 3.9 million. The dollar is falling again today as crude oil continues to push higher. Brent crude made new all-time highs in Europe due to the building tensions between Iran and the West. This is pushing our WTI crude in the US higher as well. Crude oil is trading near $109 a barrel this morning. With Europe having money problems, higher energy costs are not helping the situation. Box beef was down .02 in Choice and up .39 in select. We have been hearing talk of trade out of Western Nebraska at $128. That would be even with last week and could find more pressure in cattle due to the negative cold storage numbers that were released on Wednesday. Cash hogs were up 2.15 to 88.57 and pork cutouts remained steady but the concern for more pork in storage has been dragging hogs lower the last few days. Paul Georgy will be in Carrington ND at the NDSU Research Center today at 2:30. Please give us a call to reserve your seat at no charge. There will also be an Allendale 2012 Road Series meeting in Riverside IA on March 6th. Sign up today!
Markets as of 5:30 AM
Corn    -2 ½ to 3 ½                  Live Cattle     +40 to +50                  US Dollar Index         -.36
Beans -1 to -2                        Lean Hogs      +30 to +40                  Crude Oil                    +.62
Wheat -3 to -4                       S&P Index      +4.25                           Gold                            -3.60
Allendale Advanced Charts
Beans continue to push toward the 50% retracement level and 200 day moving average near 12.90. We have a sell order at 12.85 in case the market stalls out in that area. The bulls will need a lot of momentum to push through this key resistance level.
Nelson Notes from the desk of Rich Nelson
USDA’s 2012 crop price projections show a decline in corn from $6.20 to $5.00. Soybeans are seen declining from $11.70 to $11.50. Wheat prices are seen declining from $7.30 to $6.30. These "season average price" projections are cash + subsidies.
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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