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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 Report at 7:30

Sep 12, 2012

Good Morning! Paul Georgy with early morning comments for September 12, 2012 at 5:05 am. Grain futures are higher on short covering ahead of USDA numbers. Wheat prices are lower in Europe as Russia says they will not stop exports. Coming into this month’s USDA Supply and Demand Report grain futures were under pressure compared to July and August when prices rallied into report. Only a few hours remain for a strong price recovery before the 7:30 release. It is likely the USDA will have something for all traders to focus on in this report. Yields were the most talked about going into this report with average trade estimates for corn at 120.6 and soybeans at 35.8. In order to be friendly it will take a number less than the average estimates. Another important number will be the ending stocks. Trade averages are 592 for corn and 109 for soybeans. It will be difficult for USDA to get ending stock below 600 and 100 for corn and beans, respectively. Our Rich Nelson says, historically, the USDA gives us the lowest ending stocks for the year on the September report. The macro markets will be waiting for Dr. Bernanke’s new conference on Thursday afternoon. The German Constitutional Court should be giving us a ruling on their decision concerning the ESM funding used by the ECB this morning. Headlines will likely be a market mover in the next few days. Technical damage to chart formations in the grains has seasoned traders on edge. Boxed beef was mixed with choice up .21 and select down 1.48. Is this giving us an indication that feedlots are quick to sell cattle because of high feed costs? Spreading has been the feature in the pork complex with October gaining on the deferred. The sell-off in corn values has giving traders reason to take profits in the back months of hogs. Pork cutout values were up .96 on Tuesday.
Markets as of 5:05 AM
Dec Corn    +1
Nov Beans   +11
Dec Wheat   - 1/4
Oct Cattle +.55
Oct Hogs    +.32
Sep Dlr     -.28
Sep S+P     +8.00
Oct Crude   +.85
Dec Gold    +12.20
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Allendale Advanced Charts
Yesterday the Oct Live Cattle posted an outside range day higher. Technically this does imply strength in the Oct Cattle, we did take out the upper end of the range and it does confirm the breakout. One technical note of caution however is that the exact 50% retracement of the entire range from the 3/1 $135.00 high and the 4/27 low of $119.50 is $127.50. While this level is by no means a reason to be negative the Oct Live Cattle especially considering the strength that was shown today it is something that we must be aware of…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Corn harvest rose from 10% to now 15% complete in the latest report from USDA. This is far above the five year average and last year (both at 5%). The average analyst guess, as compiled by Reuters newswire, was a 17% pace.
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