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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.

Dry Weather in South America Provides Support

Dec 16, 2011

Good Morning! Paul Georgy with early morning comments for December 16, 2011 at 5:10 am. Overnight grain futures had narrow trading ranges. A quiet Friday with some position evening is possible after a very volatile week. Corn and wheat down nearly 16 cents and soybeans up 4 3/4 from last Friday through yesterday’s close. The outside markets have had large moves. The dollar was up 180 points while gold down 139.60 and the commodity index was down over 20 points. The European uncertainty is still very much alive. The credit ratings downgrade by Fitch of major US and foreign banks have money managers pulling out of commodities. The US senate leaders say they are getting closer to finding a solution for the spending issues. The weather in South America is dry through mid-week. If no rain shows up, the dryness will become more serious and may provide some buying interest. The mild temps and adequate soil moisture will help ease crop damage. Grain seems to be moving as I noticed many grain trucks on the road during my travels to central Nebraska. We had customers tell us yesterday that a major grain dealer was offering free DP on soybeans. That likely will open the bin doors on some beans. Corn basis has begun to slipped in some areas. Cash cattle trade is still at a standstill. Dressed beef prices were up slightly on Thursday. The USDA will release the Cattle on Feed report this afternoon at 2 pm. Feb lean hog futures had the lowest close since June 6, 2011. We expect volume to be light the last 2 weeks of the year. Stay tuned to Allendale Research for trading and risk management ideas. Looking for a last minute Christmas gift? Think about giving a ticket to the Allendale Leaders Conference in Crystal Lake, IL on January 20 and 21, 2012.
Markets as of 5:10AM
Corn: 0 to 1 lower                Beans: 2 to 4 higher             Wheat:0 to 1 lower
Live Cattle: 20 to 40 lower                           Lean Hogs: 15 to 30 lower
Dollar: .18 lower                    Crude: .10 lower                   Gold: 14.70 higher
Allendale Advanced Charts
Corn traded near unchanged most of the session on Thursday, but settled into a new low for the move. This weak close could lead to further selling as we close out the week. Next support sits down at the 5.55 level in the March contract.

Nelson Notesfrom the desk of Rich Nelson
Weekly corn sales, covering sales up until last Thursday, totaled 504,700 tonnes for old crop. That was 50% of the normal pace for that week. To meet USDA hopes we need to rebound to only a 30% lower than normal pace. This is slightly disappointing.

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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