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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.
 

USDA Releases Data at 7:30 Today

Dec 09, 2011

 

Good Morning! Paul Georgy with early morning comments for December 9, 2011 at 5:15 am. Grain futures are nearly unchanged as spreaders do last minute adjusting. Three events will give the headline traders ammunition today. We expect some announcement on progress the EU the leaders are making as they work on a solution for financial crisis. The USDA will be giving us an update to supply and demand for grains at 7:30. The trader is expecting reduced ending stocks for corn. However, Allendale is looking for a sizeable increase in ending stocks in corn and soybeans due the very poor export sales. Historically, the USDA does not make any adjustments on production in the December report. Soybeans could have an increase in stocks of 20 to 30 million bushel due to lack of China buying. The third issue is the weather forecast in South America. The GFS model is reducing moisture in the 10 day forecast in Argentina and parts of Brazil. Crops likely will not see any significant damage as temps are relatively cool. We should have some volatility in commodity markets today as we go into the weekend. We have some creative option strategies for December ‘12 corn futures, call your Allendale representative. The hog futures were hit with selling pressure once the 200 day moving average was broken. Pork cutout values have shown improvement in recent days as prices gained 1.81 Thursday. Pork values are attractive as we see fill-in buying for Christmas. We are hearing market ready hogs are tighter as producers hold back for herd building. Cash cattle were at a standstill on Thursday. However the product values have taken a nosedive. Choice down 4.44 and select was 2.09. It is getting harder and harder to trade cattle at steady money this week. Call you Allendale Representative about today’s special Conference pricing. Watch the Morning Coffee on YouTube for a breakdown of USDA Report.
 
Markets as of 5:15AM
Corn:   1 to 2 higher               Beans: 3 to 5 lower              Wheat: 1 to 2 lower
Live Cattle: 40 to 60 lower                            Lean Hogs: 10 to 20 higher
Dollar: .37 lower                    Crude: .45 higher                   Gold: 10.40 higher
 
Allendale Advanced Charts
Corn found some late strength on Thursday and managed to close a quarter cent above the key 6.00 level. Last week’s high of 6.16 is first resistance on this chart, while support is Tuesday’s low of 5.80. You must be aware of the large head and shoulder formation that would be confirmed on a close below 5.80.

 

 

Nelson Notes from the desk of Rich Nelson
For five weeks in a row, corn sales had been troubling. To meet USDA hopes they have to rebound to only 30% under normal from here on out. Thursday’s numbers, at 695,500 tonnes for old crop, were 31% under normal and are considered supportive.

 

 

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