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July 2012 Archive for 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.
 

Crop Yields Continue To Decline

Jul 31, 2012

Good Morning! Paul Georgy with early morning comments for July 31, 2012 at 5:15 am. Grain futures are higher as traders adjust positions on the last trading day of the month. There is still a lot of disagreement on the weather forecast for the next few weeks. World Weather Inc. is expecting some moisture to fall in most of the crop growing area at one time or another over the next 2 weeks. It is likely the amounts will not be general in nature but should slow crop stress and be supportive to late season crops. The USDA gave us crop conditions yesterday afternoon and reduced the G/E in corn by 2% to 24% and increased the P/VP by 3% to 48%. Soybeans saw similar changes G/E was lower by 2% to 29 and P/VP was raised by 2% to 37%. In 1988 during this same week Corn G/E was 20% and the P/VP was 47%. In 1988 soybeans had 24% G/E during this week. The bottom line to all these numbers is that the crop is still deteriorating and yields are declining. The unknown answer is, what yield is the market trading at current price levels? Investors will be watching the economic data this week. Congress is expected to vote on the extension of the 2008 Farm Bill on Wednesday. The 2013 contracts in livestock continue to be supported as traders worry about liquidation and tight food supplies next year. The livestock trade association sent a petition to the EPA asking for a waiver to RFS for ethanol mandate. There still remains talk that several US governors will plead the EPA for mandate concession. Seems to us price will change consumption of corn for ethanol and livestock. Boxed beef showed some strength on Monday as choice was up .68 and select was up .75. Pork cutout values were down .36.
 
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Markets as of 5:15 AM
Dec Corn    +5 3/4
Nov Beans   +13 3/4
Sep Wheat   +2
Aug Cattle +.10
Aug Hogs    +.12
Sep S&P     +3.25
Sep Dlr     -.10
Sep Crude   +.32
Aug Gold    +4.90
 
Need more:
Contact us directly view email: research@allendale-inc.com
 
Allendale Advanced Charts
Yesterday Nov Soybeans gapped higher from their close on Friday. The Gap is from $16.17 ½ to $16.12 now the question is do we fill this gap or leave it in our wake as we resume our bullish trend. Until we close below the pivot low of $15.36 the trend is expected to continue higher. One interesting note is that the last two times the market touched the 20day moving average which was the $15.36 low on 7/25 and $15.50 ¾ on 7/27 the market found buyer with conviction as we saw dramatic rally’s from the 20 day. I would also look for a close below the 20day to signal a change in trend.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
There are varying ideas about the size of Iowa’s corn crop. The state which was supposed to help carry the drought areas is now coming in less than expected when crop tours get in the fields.
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.

Smaller Crops in US Stir Political Action

Jul 30, 2012

Good Morning! Paul Georgy with early morning comments for July 30, 2012 at 5:15 am. Grain futures are sharply higher this morning. Weather, chart patterns and politics should be influences to watch this week. Margin clerks will even have a hand in market stability as we approach month end tomorrow. The increase in food prices is getting attention in Washington and around the world. France is talking about calling an emergency meeting of Ag Leaders. Several US Governors are expected to file a petition this week with the EPA to waive the ethanol mandate. US House of Representatives are expect to propose a vote this week on a package which would provide disaster aid to farmers and an extension of the 2008 Farm Bill. Crop conditions report, due out this afternoon, is expected to see further declines in the G/E category by 2 to 3%. This weekend’s rain did not cover as much area as was earlier expected, however, more rain is possible through Tuesday for the Midwest. Heat is in the forecast for the southern MO and IL to be near 100 again midweek. The rains in the northern cornbelt have helped stabilize the corn crop and increase the hope for a decent bean crop. The CFTC Commitment of Traders report on Friday showed managed money increasing their long positions in corn by nearly 44,000 contracts. Non-commercial traders set a new record long position in wheat and new record short positions in feeder cattle. Cash cattle closed out the week at 114 which was steady to 1.00 higher than last week. Meat products ended weak. Choice beef was down 1.3 and select was down 1.30. Pork cutout values were down .64. I want to say thank you to the Melvin’s for their hospitality and a great meeting in Buffalo ND on Friday.
 
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Markets as of 5:15 AM
Dec Corn    +20 2/4
Nov Beans   +40 3/4
Sep Wheat   +20
Aug Cattle stdy-hgr
Aug Hogs    Stdy-hgr
Sep S&P     -2.25
Sep Dlr     +08
Sep Crude   +.02
Aug Gold    +1.10
 
Need more:
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Allendale Advanced Charts
Yesterday’s strong trade in Oct. Lean Hogs closed above the 7/19 pivot high of $81.22 ½ and the downtrend line that has capped this market for the past three weeks. While this market is still at risk to a sideways churn, I feel that we must approach this trade as a base and reversal that could set up for higher prices. 
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
For now, supply is still the daily driver of prices. In the coming weeks the focus will turn to this demand picture.
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.

Grains in a Period of Changing Focus

Jul 27, 2012

Good Morning! Paul Georgy with early morning comments for July 27, 2012 at 5:15 am. Grain futures are higher as the tug-o-war of events and headlines changes trader’s minds. The EU got a shot of hopium yesterday when the president of the European Central Bank said he will do whatever it takes to preserve the Euro. This should have been supportive to grain markets but had very little effect. Various crop tours are crossing the Midwest looking at field plots and reporting what they see. Many plots suggested significantly lower yields for corn compared to trend and last year’s yield. Harvest is starting in central IL and south with test weights 51# to 54# and moisture 14% to 17%.  Reuters survey of industry analysts on corn yield estimates provides almost a daily dose of decreasing production. But the old adage is "high prices cure high prices." The USDA weekly export sales certainly were a confirmation of what high prices can do. Last week’s total corn sales resulted in net cancellations of 140,000 tonnes. Ethanol production declined last week as well. However corn futures struggled with technical resistance at 8.00 in the December contract and a deteriorating yield. Rain in the forecast will likely be too late to help the corn crop but would halt the daily loss. As we close out the week of volatile trading, soybean traders will be keying in on the forecast for rain to cover 80 to 90 % of Midwest over the next 10 days. Those following chart patterns will be closely watching the reversal week down for November soybeans where a close below 15.68 would confirm the pattern. The CME raised margin requirements on spreads in grains by $200 for hedgers. Spring Wheat tour results show an 8.2% higher yield than last year. Call your Allendale Representative to discuss ways to protect current crop insurance payment potential. Cash cattle traded at 1.00 higher at 114.00. Boxed beef was mixed with choice up .16 and select down .11. Fund buying has been a support to lean hog futures. Pork cutout values were up .23. Now headed to the airport and looking forward to seeing many of you in Buffalo, ND this afternoon at the Summer Outlook Meeting for Melvin Grain, an Allendale Branch Office.
 
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Markets as of 5:15 AM
Dec Corn    +9 1/4
Nov Beans   +25 1/4
Sep Wheat   +14 3/4
Aug Cattle -.32
Aug Hogs    +.42
Sep S&P     +2.25
Sep Dlr     +08
Sep Crude   +.10
Aug Gold    +6.60
 
Need more:
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Allendale Advanced Charts
Yesterday’s strong trade in Oct. Lean Hogs closed above the 7/19 pivot high of $81.22 ½ and the downtrend line that has capped this market for the past three weeks. While this market is still at risk to a sideways churn, I feel that we must approach this trade as a base and reversal that could set up for higher prices. 
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
There is still one last system for much of the region lined up for early next week. The coverage area and amounts have yet to be confirmed by both models. Forecast rains may help all soybean areas but Nebraska and Missouri in the coming days.
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.

Forecast Puts Rain On The Way

Jul 26, 2012

Good Morning! Paul Georgy with early morning comments for July 26, 2012 at 5:15 am. Grain futures are lower after another volatile overnight session. Weather still is a factor as GFS and Euro models are getting in sync. Drew Lerner of World Weather Inc. is sticking to his forecast that most of the Midwest will receive rains, relieving crop stress over the next 2 weeks. Temps will be cooler after this week. The grain markets seem to be shifting focus from weather to chart patterns and macro tensions. However, the daily decline in trade analysts yield estimates is providing support in corn and beans. Rich Nelson, Director of Research at Allendale, has done some demand analysis in drought years which suggests we will be looking at significant usage declines in 2012-13 to keep ending stocks manageable. Some of that study was discussed on Tuesday’s Ag Leaders Webinar which will be available Friday morning at www.allendale-inc.com . Senator Cardin, D-MD, introduced legislation this week that would reduce the ethanol mandate when corn stocks are tight. Crop tours are putting out information that confirms what farmers have been telling us, "The corn crop is devastated in some areas." The plots in Putnam County, IN were passed over as researchers said there was no corn there to count. The wheat tour was bringing back much better results for spring wheat. USDA Weekly export sales will be released at 7:30 am and estimates are: Corn 250 to 350 tmt, Soybeans 350 to 550 tmt, Soymeal 75 to 125 tmt, Bean Oil 10 to 20 tmt and Wheat 400 to 600 tmt. Cash cattle trade is at a standstill. Feedlots are hoping for higher prices as close-outs are showing losses of $275 to $300 per head. Boxed beef closed on Wednesday mixed. Choice was down .15 and select was up .11. Lean hog futures has had a several day run to the upside. However pork cutout was up only .16 on Wednesday.
 
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Markets as of 5:15 AM
Dec Corn    -4 1/4
Nov Beans   -27 1/2
Sep Wheat   -10
Aug Cattle -.27
Aug Hogs    +.40
Sep S&P     -1.00
Sep Dlr     +.03
Sep Crude   -.47
Aug Gold    -4.30
 
Need more:
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Allendale Advanced Charts
Yesterday’s trade in Oct. Live Cattle has continued the lateral choppy type of price action we have seen over the last week. While we have seen a break of four consecutive inside range days we did close inside the previous day’s range. I still think that this market should be approached from the long side unless we see close below the 7/19 low at $122.10.
 
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
Confirming rumors circulating for some time, Smithfield Foods, the nation’s largest hog producer and largest pork processor, confirmed it had purchased an un-specified amount of Brazilian corn for import to the US. One South American analyst suggested there was a $55 per metric tonne discount and shipping was only $30 to $40.
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.

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
 
Need more:
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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.
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.

Reversal in Grains as Storms Roll Through Midwest

Jul 24, 2012

Good Morning! Paul Georgy with early morning comments for July 24, 2012 at 5:10 am. Grain futures are lower due to profit taking and follow through selling. We are still in a weather market as volatility is very high. However we are adding another twist to the weather market going on in the grain complex. The technical chart watchers are very concerned about the reversal in corn, beans and wheat on Monday. A close today in the lower half of trading range could accelerate the downward pressure. Weather forecasts overnight are keeping the significant rain covering for the Midwest later this week with temps cooling off. Drew Lerner from World Weather Inc. is watching the development of the El Nino pattern which could provide a major change in weather for Midwest. The USDA lowered G/E crop conditions by 5% in corn and 3% in soybeans to 26% and 31%, respectively. These numbers were a little better than trade was expecting. Poor to very poor conditions were raised to 45% for the corn crop. The macro market news of higher bond prices in Spain and Italy has large investors nervous about their commitment to commodities after recent rallies. USDA cattle inventory report is due to be released on Friday afternoon. That should give us a better idea of the long-term posture of the cattle industry. Feeder cattle futures are stronger as corn prices slip. Boxed beef was lower on Monday afternoon. Choice was down .54 and select was down .16. Pork prices are struggling with demand however the heat is slowing gains and breeding problems will likely have an effect on hog supplies down the road. Pork cutout values were down .26 on Monday.
 
Check out the Allendale Research Center Special Offer. Make sure you attend the Allendale Ag Leaders Webinar tonight, at 8:00 pm, you can sign up by clicking here.
 
Subscribe today to the Allendale Research Center for a special introductory price.
 
 
Markets as of 5:10 AM
Dec Corn    -.10
Nov Beans   -.35 1/4
Sep Wheat   -.19 3/4
Aug Cattle -.05
Aug Hogs    +.12
Sep S&P     -2.00
Sep Dlr     +.15
Sep Crude   +.13
Aug Gold    -4.10
 
Need more:
Contact us directly view email: research@allendale-inc.com
 
Allendale Advanced Charts
Yesterday’s trade in the Nov Soybeans did set the market up for talk of a "top" being put in. We opened up at new contract highs at $16.91 1/2 and proceeded to sell off until we hit limit down at $16.16 1/4. If we do see a lower close tomorrow that will confirm a "key reversal" on the Nov Soybean chart. Until we see a close below $15.98 1/2 the chart has not sustained enough damage to assume a peak and reversal scenario.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
The EU problems persist. On Friday, Spain’s Murcia region asked the federal government for financial assistance. On Sunday another region, Valencia, also asked for a bailout. As of current, there are said to be six other regions ready to join these two.
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.

Dec Corn Hits $8.00 and Reverses

Jul 23, 2012

Good Morning! Paul Georgy with early morning comments for July 23, 2012 at 5:10 am. Futures are lower after opening at new historic highs in Dec corn and Nov soybeans. Weather forecasts have moved the high pressure ridge further west for the last half of this week which should make way for some moisture to cover 85% of Midwest. This is cooler and wetter than what was expected going home on Friday. This week, some big US crop tours take to the road. Cropcast weather service will be looking over the corn and soybean field as they tour the Midwest starting today. The US Wheat Quality Council will be checking the North Dakota wheat fields starting tomorrow. Cash basis remains strong in soybeans but some central cornbelt locations have lowered corn bids. Traders are estimating China needs more soybeans to finish out the year but are concerned about how they will act with record setting prices. The CFTC report on Friday put non-commercials with record long positions in wheat, when earlier this year they were record short wheat. Managed money continued to build long positions in corn and soybeans. The weekly crop conditions will be released this afternoon at 3:00 pm. Traders are expecting further deteriorating of corn and soybeans from the G/E category. USDA gave us the Cattle-on-Feed data last Friday which was considered to be neutral and in line with trade estimates. This week we have the bi-annual cattle inventory report on Friday at 2:00 pm. Following cow slaughter from the beginning of the year, we have seen herd expansion from Feb through May. However, in June, cow slaughter jumped compared to a year ago due to poor pasture conditions, weak feeder prices and high feed cost. Friday’s data could still show an increase in herd buildup because data is collected as of July 1. Boxed beef on Friday was lower, choice was down 1.27 and select down 1.02. Pork cutout was up .01. Check out the Allendale Research Center Special Offer. Allendale Ag Leaders Webinar is scheduled for tomorrow, Tuesday evening at 8:00 pm, you can sign up today.
 
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Markets as of 5:10 AM
Dec Corn    -20 3/4
Nov Beans   -37 1/2
Sep Wheat   -26
Aug Cattle stdy-lwr
Aug Hogs    stdy-lwr
Sep S&P     -15.75
Sep Dlr     +.26
Sep Crude   -2.78
Aug Gold    -11.50
 
Need more:
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Allendale Advanced Charts
Yesterday’s impressive rally in the Oct Live Cattle has left a potential triple bottom on the chart. However we cannot confirm any type of chart pattern unless we see a higher close tomorrow. We feel that the today’s rally taking out the last four days of price action is very positive going forward. Now all bullish decisions should be risked against the $119.50 low established on 4/27.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
In June, Chinese home prices stopped their eight month slide. Some suggest this is a sign China’s monetary easing is taking effect. China’s economic growth has been slowing in recent quarters.
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.

Commodity Prices Affected By Risk Off Attitude

Jul 18, 2012

Good Morning! Paul Georgy with early morning comments for July 18, 2012 at 5:15 am. Corn and soybean futures are lower this morning. Corn tested all-time highs yesterday but was unable to close above it and therefore traders are taking some profits off the table. We are still in a weather market and traders are still trying to determine the yield for this year’s corn and soybean crop. Estimates continue to slide on a daily basis. Weather forecasts give the best chance for rain in the eastern cornbelt today through Friday. Amounts are not expected to be enough to stop crop stress. The concern over demand is becoming an important topic for traders. Tomorrow morning the USDA will release the export sales estimates. When the traders take a break from focusing on weather, they are still faced with the world economic struggles and potential demand deterioration. However, corn and soybeans should be well supported on setback. The cash cattle traded 1.00 to 2.00 lower yesterday at 113.00. Boxed beef was higher with choice up .61 and select up .67. Pork cutout values up 1.22 on Tuesday.
 
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Markets as of 5:15 AM
Dec Corn    -10 1/2
Nov Beans   -11 1/4
Sep Wheat   -14 1/2
Aug Cattle -.02
Aug Hogs    -.22
Sep S&P     -5.00
Sep Dlr     +.22
Aug Crude   -.46
Aug Gold    -11.90
 
Need more:
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Allendale Advanced Charts
Yesterday Dec Wheat put in its forth trading session in a row of putting in a new high. While we did rally from our lows, we must remember that sellers were present. If we do see a significant setback we must see a close below the 7/11/12 low of $8.16 ¼ to negate the uptrend.

Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
The nation’s collective rise in prices at the consumer level remains in check. For two months in a row, consumer level prices are 1.7% higher than last year. Inflation of food products is higher at 2.7% higher than last year. Many in the financial community are concerned these high grain prices will translate into higher food costs over the next year and a half.
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.

Crop Conditions Drop Further

Jul 17, 2012

Good Morning! Paul Georgy with early morning comments for July 17, 2012 at 5:15 am. Corn and soybean futures are lower as recent buyers take profits. Chartist will be watching for a key reversal after markets opened sharply higher yesterday evening. Monday’s low will be important support today. We are in a weather market and we need a change in events to convince traders that the supply side of the balance sheet has stabilized. A statement taken from World Weather Inc. says, "…The bottom line remains one of serious concern over declining corn and soybean production potentials in a large part of the U.S. Midwest. The region of greatest declining production potential is now in the southwestern Corn Belt from Kansas, Missouri and a part of Illinois into Iowa, Nebraska and a part of South Dakota. Temperatures will continue warmer than usual with limited rainfall resulting in net drying for many areas and continued plant stress that will maintain downward pressure on production potentials…" Crop ratings did not disappoint the bulls. Corn G/E fell by 9% when most traders were looking for a 6 to 8% decline. Soybeans ratings went to 34% G/En down 6% from last week and not far off the estimate of 3 to 5% the trade was talking about early yesterday. South Dakota took the biggest drop in G/E as it was down 18% to 41% G/E. Missouri is the hardest hit state overall at just 10% rated G/E, down 3% on the week. Indiana is just a bit better at 11% G/E and Illinois was rated 17% G/E. Russian Ag Minister reiterated in spite of lower production numbers, Russian exports are expected to reach 18 to 20 mmt. Rich Nelson did a study on demand deterioration due to price rallies in corn. We realize it is important to find out corn and soybeans production but we must realize the damage price rallies due to overall demand. It is important to note demand doesn’t come back quickly. More details will be discussed on the July 24th, Allendale Ag Leaders Webinar. You can sign up today. Feeder Cattle futures have come under tremendous selling due to high feed costs and large losses cattle feeders are seeing at close out. We are hearing reports of a large number of cows going to market because of lack of feed supplies and high costs. Boxed beef was lower again on Monday choice down .10 and select down .38. Pork values were down .68 also. Subscribe today to the Allendale Research Center for a special introductory price.
 
 
Markets as of 5:15 AM
Dec Corn    -6 3/4
Nov Beans   -9 3/4
Sep Wheat   -13 3/4
Aug Cattle -.62
Aug Hogs    -.47
Sep S&P     +4.25
Sep Dlr     -.06
Aug Crude   +.06
Aug Gold    +2.70
 
Need more:
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Allendale Advanced Charts
New highs were established in the Nov Soybeans again during Monday’s trade. While we were not able to probe the psychologically significant $16.00 level, we have established yesterday’s low of $15.58 as the new minimum risk objective this market must respect in order to keep the uptrend intact. 

Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
 
Nelson Notes from the desk of Rich Nelson
The trade is eager to see the new NOAA long term outlook for the month of August. That will be out on Thursday. It was their June 21 release, for the month of July outlook, which turned Allendale supportive to the market. This week’s update could give us more insight on soybean yields.
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.

Fifth Straight Week of Higher Opening for Corn

Jul 16, 2012

Good Morning! Paul Georgy with early morning comments for July 16, 2012 at 5:15 am. Corn and soybean futures are sharply higher and appear to be headed to the next handle. Heat moving back into the Midwest the next few days is firing up the bullish emotion and the deteriorating crop potential. World Weather Inc. comments, "… The greatest coverage and amounts of rain expected in the next ten days may occur Tuesday into Thursday of this week. However, most of the rainfall will continue a little too light to counter evaporation with daily highs varying in the middle 80s through the middle 90s and even warmer near and to the west of the Missouri River. It will be very difficult for very many locations to experience a net boost in soil moisture for more than a quick day or possibly two. Most of the rain will be lost to evaporation within a few hours of its fall suggesting crop stress will prevail in many areas. However, coverage will be 65% in the western Corn Belt Tuesday into Thursday of this week and near 80% in areas to the west of the Mississippi River…" Crop condition update to be released this afternoon will likely show the G/E falling sharply again this week. The chart watchers are now jumping on the long side as last week’s reversal was negated. November soybeans have now made new highs for 7 weeks in a row. December corn has now opened sharply higher for the 5 week in a row. The rally in price of grain is having an effect on demand but how much is the question analysts are struggling with. However we expect grains to be well supported until crop loss stabilizes. Livestock futures are under selling pressures due to high feed cost. Boxed beef was lower on Friday. Choice was down 2.09 and select was down .85. Pork cutout value was stable as it was down only .02. Subscribe today to the Allendale Research Center for a special introductory price.
 
 
Markets as of 5:15 AM
Dec Corn    +28 1/2
Nov Beans   +35 3/4
Sep Wheat   +25 1/4
Aug Cattle Stdy-Lwr
Aug Hogs    Stdy-Lwr
Sep S&P     -4.00
Sep Dlr     +.21
Aug Crude   -.37
Aug Gold    -8.10
 
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Allendale Advanced Charts
In Friday’s trade, we took out the Contract high at $7.48 buy one cent at $7.49. In the short term, as long as we don’t fill the gap between $6.75 and $6.85 higher trade is expected. For producers we feel that these are still fantastic levels to price unprotected bushels.
 

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Nelson Notes from the desk of Rich Nelson
The drought has made it all facets of the general media. CNBC began daily coverage five days ago. This morning it is now a headline on the front page of both google.com and yahoo.com. Old trading psychology suggests a rally is nearing an end when the general public hears about it.
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.

Weather Market Still Alive

Jul 13, 2012

Good Morning! Paul Georgy with early morning comments for July 13, 2012 at 5:15 am. Corn and soybean futures are sharply higher as traders wait to see rain. The technical reversal on Wednesday could not withstand the weather market. The conflicting forecasts coming out of the Euro and GFS models continue to fuel the buying in grains. Drew Lerner from World Weather Inc. says, "…The bottom line remains one of serious concern over declining corn and soybean production potentials in the central and lower U.S. Midwest. The region of greatest declining production potential is now in the southwestern Corn Belt from Kansas, Missouri and a part of Illinois into Iowa, Nebraska and a part of South Dakota. Temperatures will trend warmer next week, but will not be as hot as those of this past week. Some periodic relief to dryness is possible in a few locations in the Midwest periodically as scattered showers evolve, but most of them will be too light and localized to seriously change soil and crop conditions…" Technicians are looking at the highs made on Wednesday in grains as the level which will negate the big day reversal. Watch weekend weather forecasts as the day progresses. Cash cattle traded $2.00 lower in the south with the dressed trade in NE $4.00 to $5.00 lower. Boxed beef values were lower again on Thursday. Choice was 1.78 lower and select was down .24. We were happy to see the release of new export data. For the month of May, US pork exports were 10% higher than last year. Imports for the month were 3% lower than last year. This is good news and shows we were able to shove out much of that oversupply in available hogs that hit during that month. Looking at the chicken data, we have good news to report as well. US chicken exports in May were 6% higher than last year. Pork cutout values were down only .06 on Thursday. Subscribe today to the Allendale Research Center for a special introductory price.
 
 
Markets as of 5:15 AM
Dec Corn    +13
Nov Beans   +24 3/4
Sep Wheat   +16
Aug Cattle -.22
Aug Hogs    -1.10
Sep S&P     +4.75
Sep Dlr     -.05
Aug Crude   +.67
Aug Gold    +14.50
 
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Allendale Advanced Charts
Yesterday’s trade in Aug. Lean Hogs may have set up what could be a short term rejection pattern. While it looks like a rejection from the highs of today’s bar we must remember that buyers were present at this level and unless the low is taken out, sellers have a false sense of security at this level. We still must be aware though of the downtrend line that has capped this market since the pivot high of $96.32 1/2 was established on 7/02.
 

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Nelson Notes from the desk of Rich Nelson
New crop stocks were lowered from 1.881 billion to 1.183 billion bushels. Expect the August report to have another production drop when USDA recognizes their harvested acres estimate is too high.
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.

Futures Provide Caution Signal

Jul 12, 2012

Good Morning! Paul Georgy with early morning comments for July 12, 2012 at 5:15 am. Corn and soybean futures are mostly higher. We are still in a weather market as the Midwest is dry. The weather models put a better chance of rain for early next week. However, temps will warm up again but not a hot as last week. Futures markets are providing signals of caution. Yesterday’s huge range in corn, soybeans and wheat were technically an outside day reversal after posting new contract highs. Volume was extremely heavy with corn trading over 324,000 and soybeans 219,000 contracts. The government went all-in on the corn yield estimate by giving us nearly a 20 bushel per acre reduction from last month. This surprised traders as they were expecting a more statistical adjustment and expecting the big adjustment in August. History tells us yields are likely to go down again by year end. The demand adjustment made by USDA is the possible catalyst for the profit taking sell-off. Using the reduced production there still is 1.223 billion bushel ending stocks. The 100 million bushel drop in corn for ethanol raises concerns that further demand reduction could come out of ethanol. The announcement by Secretary Vilsack that CRP land will be opened for haying or pasture should be helpful to livestock producers in drought-stricken counties. Key chart support is the gap from 6.75 to 6.86 left on the December corn chart on July 5th. A close below this support level will likely increase selling bias. Live cattle futures struggle as boxed beef prices continue to slide. Choice was down .54 and select was down .68. Pork cutout was down only .02. Feedlots continue to fill up with cattle that are running out of grass. The next Allendale Ag Leaders Webinar is July 24th.
 
 
Markets as of 5:15 AM
Dec Corn    +13 3/4
Nov Beans   +1 1/2
Sep Wheat   +7 1/4
Aug Cattle -.47
Aug Hogs    +.30
Sep S&P     -7.50
Sep Dlr     +.03
Aug Crude   -.82
Aug Gold    -10.80
 
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Allendale Advanced Charts
Yesterday’s trade in the Dec Corn has created a bearish pattern for the short term. The fact that we made new highs and closed lower on the day has left a key reversal at the top of the chart. From a symmetrical point of view, we gave back four days of gains in one day which is never action you want to see at a top. Now the level of major importance is the $6.85 level. If we do get below $6.85, we should fill the gap to $6.75 which would be termed exhaustion gap and leave today’s $7.48 high the pivot high that all hedges and bearish plays should be risked against.
 

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Nelson Notes from the desk of Rich Nelson
New crop stocks were lowered from 1.881 billion to 1.183 billion bushels. Expect the August report to have another production drop when USDA recognizes their harvested acres estimate is too high.
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.

Tension Builds as USDA Report Approaches

Jul 11, 2012

Good Morning! Paul Georgy with early morning comments for July 11, 2012 at 5:15 am. Corn and soybean futures are mostly higher ahead of USDA report. Open Outcry session will open at 7:20 this morning. Any weather forecast change will likely overshadow the USDA report. However traders will use the report to adjust yield as the USDA will be using estimates from July 1. Cash markets at the gulf are weaker in corn overnight. Demand is slowing down for higher priced grains. USDA report is out at 7:30 this morning. Key points to watch for are 2011-12 ending stocks for corn and soybeans. Trader’s average estimates are 170 mb for beans and 840 mb for corn. Yield will be the key to ending stocks for 2012-13. Traders are expecting corn yields to drop to mid to low 150’s on this report. That would take ending stocks down to 1.232 mb from 1.881 mb last month. Also keep an eye on changes in world production. Get the full breakdown on the Allendale "Morning Coffee". Cash cattle are still at a standstill this week. Product is under pressure with choice beef down 2.16 and select down .73. Lean hog futures are testing technical support as product continues to come in at lower money. Pork cutout was down .28 on Tuesday. Subscribe to the Allendale Research Center to get the full market updates.
 
 
Markets as of 5:15 AM
Jly Corn    +5 1/2
Jly Beans   -6 1/2
Jly Wheat   +4
Aug Cattle +.45
Jly Hogs    +.45
Sep S&P     +2.25
Sep Dlr     -.19
Aug Crude   +.75
Aug Gold    -5.20
 
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Allendale Advanced Charts
Yesterday’s trade in Dec Wheat shows a market that is still taking a break at higher levels. While the major uptrend is the dominant feature on the chart if the gap that was left on 7/5 is filled, a correction should be expected.

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Nelson Notes from the desk of Rich Nelson
While the market has been following the high priced corn issue closely from a short term standpoint we still feel this should be more of a long term story. Extremely high temperatures in the past two weeks likely impacted breeding herd performance.
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.

Talk of Brazilian Corn Coming Into US

Jul 10, 2012

Good Morning! Paul Georgy with early morning comments for July 10, 2012 at 5:15 am. Corn and soybean futures are lower on profit taking and wetter forecast. The USDA crop conditions report gave corn a 40% G/E rating this week. Traders were expecting a double digit loss. The Iowa corn and soybean crops fell by 16% in the G/E rating last week. IL and IN crop ratings fell to 19% and 12% respectively this week. Weather models are putting more rain in the forecast. "World Weather Inc. continues to support a period of slight relief in the next two weeks, but please make sure to note that July rainfall may have a tough time raising soil moisture for very long leaving the potential for more stress later in the month. We still believe that as El Nino evolves in late July and August rain potentials may increase additionally benefiting soybeans, but probably coming too late for corn. If El Nino does not develop significantly there may be additional moisture stress and potential production declines to deal with. The odds are certainly favoring El Nino, however." The marketplace received another blow late yesterday when the story broke that an FCM located in Cedar Falls, IA had problems. The demand side of the balance sheet is starting to get attention as prices move higher. There is talk circulating that a Wilmington, NC firm is importing 1 million tonnes of Brazilian corn into the US. It does make economic sense but the loading lineup out of Brazil is still long. Grain markets are extremely overbought. The USDA Supply and Demand Report will be released on Wednesday morning. Trade will be looking for lower yield numbers and using that estimate as a number to adjust down from on the next report.  Choice beef was down 2.14 while select was up .36. Pork cutout continues its slide, falling .26. Catch the Morning Coffee before 8:00 am.
 
 
Markets as of 5:15 AM
Jly Corn    -12 3/4
Jly Beans   -12
Jly Wheat   -15 3/4
Aug Cattle -.17
Jly Hogs    -.35
Sep S&P     +4.00
Sep Dlr     -.12
Aug Crude   -.50
Aug Gold    +4.50
 
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Allendale Advanced Charts
Yesterday’s trade continues the climb to higher prices with a new contract high. While we were not able to close at the highs the market strength has thus far been very impressive. I expect the uptrend to continue until the gap between $14.93 and $14.78 is filled.

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Nelson Notes from the desk of Rich Nelson
This year’s pollination, through Sunday, has been made at a record 9.5% higher than normal temperature. Give the forecast for more moderate temps, pollination could end 6.7% higher than normal. That would be the third highest level since 1980.
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.

Heat Takes Visible Toll on Corn Crop

Jul 09, 2012

 

Good Morning! Paul Georgy with early morning comments for July 9, 2012 at 5:15 am. Corn and soybean futures are sharply higher. The week ahead could provide some moisture to the Midwest but the benefit will come in cooler temps. "It seems the second week has been advertised wetter every week since the drought began and that is largely true. However, World Weather, Inc. is a little more encouraged by the opening of the Gulf of Mexico and a subtropical high pressure system in the Atlantic that is relocated back into a more traditional position." The crop conditions report this afternoon is expected by traders to fall sharply. Many are looking for an 8 to 10% drop in the G/E category. On Wednesday of this week the USDA will give us a yield number which traders will likely use to forecast lower yields. The demand side of the equation is getting no attention right now. But one would have to expect a slow down due to the increase in price. Headlines out of EU will have a smaller impact on grains until rain covers the cornbelt. Livestock markets are being impacted by the record heat and high grain prices. Boxed beef prices were lower on Friday with choice down .92 and select down 1.13. Pork cutout values were down .51. Meat demand usually slows down as we move toward the end of July. Listen to the "Morning Coffee" on YouTube before 8:00 am.
 
 
Markets as of 5:15 AM
Jly Corn    +21 3/4
Jly Beans   +35 1/4
Jly Wheat   +13 1/2
Aug Cattle stdy-hgr
Jly Hogs    stdy-hgr
Sep S&P     -6.50
Sep Dlr     -.07
Aug Crude   +.34
Aug Gold    +3.10
 
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Allendale Advanced Charts
Friday’s inside day in Dec. Corn does show a market that is slowing down at higher prices. Ultimately, the next move in Dec corn will come down to the gap that is left between $6.75 and $6.85. If we see the gap filled then it is safe to assume that we have an exhaustion gap on the chart and the market should turn if it is indeed a breakaway gap we will not see the gap filled and it projects to $8.46.

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Nelson Notes from the desk of Rich Nelson
The government’s monthly employment report came in a little disappointing. 80,000 jobs were added to the non-farm payrolls number in the month of June. That was below trade estimates calling for a 90,000 increase. In each of the past three months, under 100,000 jobs were added.
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.

 

Grains Dip on Profit-Taking as Forecast Changes

Jul 06, 2012

 

Good Morning! Paul Georgy with early morning comments for July 6, 2012 at 4:45 am. Corn and soybean futures are lower on profit taking and a little wetter forecast. Grain prices have rallied 30 to 38 percent in less than 3 weeks. World Weather Inc. says, "The bottom line remains one of serious concern over declining corn production potentials in the eastern and lower U.S. Midwest. Some rain will occur across the Midwest with the onset of cooler air this weekend into early next week, but the amount of rain that falls will stay lighter than that needed to induce a serious change in crop moisture and plant development. But any rain would be better than none. Greater rain frequency and intensity will impact the Midwest July 13-20, but it should not be a general soaking that would end drought. It will help to ease up on crop stress and provide a little better environment for "some" crops to reproduce in." Weekly export sales will be released at 7:30 this morning. The estimate for corn is 200 to 500 tmt, soybeans 400 to 650 tmt and wheat 300 to 450 tmt. The macro markets are adjusting from yesterday’s sharp move due to the interest rate cuts in China and ECB. The grain traders will likely be willing to take some profit today as hope of rain increases over weekend although crop damage is irreversible in many areas. Livestock producers are affected by the heat as weight gains fall and feed cost rise. Boxed beef values were mixed, choice up .35 and select was down 1.52. This could be an indication of cattle going to market early due to high feed cost. Pork cutout values continue to side as they were down another .92 on Thursday. Hope to see some post-holiday fill-in buyers to support product early next week. Traders will be looking ahead to Monday’s crop conditions report as we end the week. Check out YouTube "Morning Coffee" comments for more details.
 
 
Markets as of 4:45 AM
Jly Corn    -17
Jly Beans   -15 1/2
Jly Wheat   -27 3/4
Aug Cattle +.12
Jly Hogs    +.97
Sep S&P     -2.75
Sep Dlr     +.07
Aug Crude   -1.44
Aug Gold    -15.30
 
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Allendale Advanced Charts
Dec. Wheat’s strong uptrend continued today with new highs. This market’s parabolic uptrend should correct at some point. A bullish mentality is advised until the $7.59 level is taken out.

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Nelson Notes from the desk of Rich Nelson
Though temperatures will return to normal in the coming days the trade is primarily concerned with the developing drought. Expect yield losses to continue.
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.

 

Traders Set Sights on Thursday’s Grain Opening

Jul 03, 2012

 

Good Morning! Paul Georgy with early morning comments for July 3, 2012 at 5:15 am. Corn and soybean futures are higher. There is no question we are in a weather market in the grains. As long as we do not get rain, the corn and soybean production potential is deteriorating. The USDA gave us the weekly conditions report yesterday afternoon. Both corn and soybean crops were down 8% in the good to excellent category. Corn conditions in IL were down 11% with IN down 8% putting them at 26 and 19 respectively. Soybeans hardest hit were in IL down 7% and NE down 12%. The supply side of the equation has been getting all the attention and rightfully so. However after $1.66 rally in Dec corn futures and $2.20 rally in Nov soybean futures there are concerns in trade about the demand. Dr. Good from the University of Illinois in a recent article suggested corn demand could drop from the USDA estimate of 13.775 to near 13.3. The global economic uncertainties and the sharp price rallies in futures have end users going to a hand-to-mouth buying approach. Friday’s enthusiastic rally in the macro markets quickly became a downer after the weekend. Some of the Scandinavian countries are beating the drum that they will nix the deal suggested by the EU leaders last Friday. We have had disappointing news from US, Asia and Europe when the PMI data was released. The CME markets will close today at noon and not reopen until Thursday morning. With a touch of rain, the forecast it seems likely to see some profit taking before the holiday. Livestock futures are seeing some position evening ahead of the holiday. Boxed beef was lower with choice down .03 and select was down .48. Pork cutout values fell 1.58 as holiday buying is complete. The next Wake-Call will be Friday morning. With the late opening on Thursday we hope you can watch the Morning Coffee video from www.allendale-inc.com.
 
 
Markets as of 5:15 AM
Jly Corn    +9 1/4
Jly Beans   +16
Jly Wheat   +4 3/4
Aug Cattle +.47
Jly Hogs    -.45
Sep S&P     +.50
Sep Dlr     +.01
Aug Crude   +1.46
Aug Gold    +11.70
 
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Allendale Advanced Charts
Yesterday’s Nov. Soybean trade made a new contract high of $14.55 3/4. While we did see a pull back from our highs during the day session unless we see a break below $14.00 which is old resistance turned support a bullish approach is advised.

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Nelson Notes from the desk of Rich Nelson
We saw an export sale of 1.2 million tonnes of 12/13 delivery to an unknown destination announced at 8 am Monday from the USDA. This is the fifth largest export sale in history. There were rumors around the market today that this export sale was to Brazil to satisfy contracts they made that they could not fulfill with their production.
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.

 

Heat and Lack of Rain Fire Up Futures

Jul 02, 2012

 

Good Morning! Paul Georgy with early morning comments for July 2, 2012 at 5:15 am. Corn and soybean futures are higher this morning. Pockets of showers and thunderstorms brought around .50 inches or less across IA the northern half of IL, IN and OH. Temps are expected to be in the mid to upper 90’s this week ahead of another front moving through late this week. Next weekend’s rains could be very similar to this past weekend. Holiday trading hour changes start tomorrow at noon at which time the electronic and pit will close. No night sessions on Tuesday or Wednesday. The pit and electronic sessions will open at 9:30 on Thursday morning. Thursday evening and Friday will have regular trading hours. The USDA will give us a crop conditions report this afternoon. Traders are expecting a 4 to 6% decline in corn conditions. Traders saw fund buying in outside markets on Friday after EU leaders committed to reform of the EU banking system. The question this week is: "Will the funds jump on the weather rally in grains?" News out of Washington will be limited this week as congress is on holiday. However, there will be a lot of speeches given for July 4th celebrations in their home states. Watch for headlines out of EU but we would expect things to be quiet there for a few days. Heat is affecting the livestock industry as reports of cattle loss in feedlots are coming into our office. The hog industry will likely suffer some conception problems in sows therefore reducing supplies 6 to 8 months out. The Hogs and Pigs report was slightly negative but markets will be dominated by weather. Cash cattle traded at steady prices at 116. Demand is a concern for both pork and beef as the hot weather will likely limit some barbequing. Boxed beef was lower on Friday with choice down 1.46 and select down 2.24. Pork cutout values were down .72 to close out the week. A programing note: the Wake-Up Call will not be produced on Wednesday or Thursday morning. I will be back again on Friday. Watch the Morning Coffee on YouTube to catch the early calls on Thursday Morning. Have a Happy and Safe July 4th holiday week.
 
 
Markets as of 5:15 AM
Jly Corn    +13 1/4
Jly Beans   +18
Jly Wheat   +11 3/4
Aug Cattle Stdy-hgr
Jly Hogs    Stdy-lwr
Sep S&P     +1.50
Sep Dlr     +.11
Aug Crude   -1.60
Aug Gold    -13.80
 
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Allendale Advanced Charts
Friday’s outside range day continues to imply a nervous market at the $6.50 level. We have made our highs on selling for the third day in a row which should imply weakness in the Dec. Corn. We still need to see a close below the 6/27 low of $6.17 ¼ or a close above the 6/27 $656 ¾ high to assume the next leg of the move.
 

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Nelson Notes from the desk of Rich Nelson
USDA’s efforts to resurvey farmers in early June found they added 541,000 corn acres from the March intentions survey. The trade was expecting a 226,000 increase. More importantly, USDA brought down it harvested acres estimate from 89.1 to 88.851 million (-249,000). This is slightly bullish to corn.
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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