Argentine Weather Takes Backseat to USDA Report
Jan 11, 2012
Good Morning! Paul Georgy with early morning comments for January 11, 2012 at 5:15 am. Grains trade in narrow ranges overnight as traders get positioned for report. Expect volume to pick up on the close today ahead of USDA Report tomorrow morning. Marco markets are providing underlying support for ag commodities as thoughts of China reducing interest rates, EU optimism of finding a solution for banking crisis and economist looking for world GDP increases by year end. The USDA report tomorrow morning will be filled with surprises. But be prepared to act on the unexpected as these surprises will likely be priced into the market within 2 trading sessions especially ahead of a long weekend. Areas where surprises could arise are in soybean exports as the recent decline in shipment could give a 30 to 40 mb reduction. Global wheat stock could jump on increases in FSU and Argentina production. The focus of the trade is on corn and the expectation of production being lowered and usage being increased in the feed and ethanol area. Export demand for corn for the first quarter in the marketing year has been dismal. Traders are reluctant to be aggressive buyer ahead of report and while rain is falling in Argentina. The weather models have a ridge of dry conditions building for a few days, then another chance of rain late next week. We believe the rally we are experiencing in new crop corn is an opportunity to protect a portion of your 2012 production. Returns on corn versus beans are over $400.00 per acre in favor of corn. This will entice more corn acres to be planted. Call your Allendale Advisor to get all the details. The
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Markets as of 5:15 AM
Corn: 0 to 1 higher Beans: 4 to 6 lower Wheat:0 to 1 lower
Live Cattle: 15 to 30 lower Lean Hogs: 30 to 40 lower
Dollar: .37 higher Crude: .65 lower Gold: 5.10 higher
Allendale Advanced Charts
The February Lean Hog futures are higher and near downtrend resistance. There is a potential near term double bottom with major support at 82.20. A close above the red down trend line is needed to convince bears to change direction.
Nelson Notesfrom the desk of Rich Nelson
The European Union agreed to hold a meeting on January 23 of foreign ministers. This Foreign Affairs committee will decide whether to start an oil embargo against Iran. Oil supply fears are keeping crude prices high.
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.
