Grain Futures Give Up Gains
Jan 24, 2012
Good Morning! Paul Georgy with early morning comments for January 24, 2012 at 5:25 am. Grains are lower on profit taking and a risk-off attitude by funds. Cash corn markets are very strong as basis is strengthening due to lack of farmer selling. USDA said farmers were holding 2/3 of US corn inventories. The Argentina Ag Ministry has lowered the corn crop from 30 mmt to 23 mmt. The soybean crop was lowered from 52-53 mmt to 48.9 mmt. However wheat crop was raised from previous estimate of 12 mmt to 13.4 mmt. The Ag Ministry said corn crop was 1% excellent, 32% good, 42% average and 25% poor. Navigation problem in the port of Rosario (Argentina’s Largest Port) has been at a standstill since last week due a boat being stranded. There are reports of nearly 100 ships waiting to load and unload. This logistics problem has provided support for US corn and soybean markets. Drew Lerner from World Weather Inc says, "The bottom line in Argentina allows timely rainfall to fall across the nation Monday evening and overnight. The precipitation will be welcome, but it may not be evenly distributed and some crop areas will still require additional moisture to further improve topsoil moisture after recent warm and dry conditions. Follow up rain will hold off until next week and because the rain comes as erratic showers and thunderstorms the relief may not be evenly distributed leaving some crop areas notably stressed while others get some welcome relief." Marco markets are waiting for FOMC meeting minutes on Wednesday. The latest Greece debt swap for private creditor was rejected but still in negotiations. The timeline for getting a deal and putting it in place is said to be 5 weeks. The debt payment is due in early March. Beef product prices were strong on Monday as Choice was 1.52 higher and Select was 2.21 higher. The reduced slaughter schedule is helping support prices. The pork cutouts were down .37. Livestock futures put in a positive performance on Monday. Should see support on setbacks. Subscribers should check out the price outlook charts on Allendale Research Center.
Markets as of 5:25 AM
Corn: 4 to 5 lower Beans: 9 to 10 lower Wheat:4 to6 lower
Live Cattle: 30 to 40 higher Lean Hogs:30 to 50 higher
Dollar: .13 higher Crude: .50 lower Gold: 10.20 lower
Allendale Advanced Charts
Beans closed strong on Monday and settled just above current downtrend. This makes today’s action key. If there is follow through strength then it opens the door for a move to 12.31 or possible 12.46. If there is no follow through we may see a return to the recent lows near 11.75 or 11.50.
Nelson Notes from the desk of Rich Nelson
US: On Friday, a US based analysis firm updated its 2012 planting estimates. They are looking for:
94.748 for corn
74.568 for beans
57.9 for wheat
Allendale looks for:
93.917 for corn
76.008 for beans
56.288 for wheat
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