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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.
 

Mild Winter Increases Field Maintenance

Mar 20, 2012

Good Morning! Paul Georgy with early morning comments for March 20, 2012 at 5:10 am. Grain prices are lower this morning. Money flow out of agricultural commodities started on Monday as the major force behind this selloff. Although traders are in a tug-o-war as they determine the value of old crop corn versus new crop in both corn and beans as we approach the USDA Report. Allendale research has looked at the effect of 95.0 million acres of corn and 74.5 million acres of beans on ending stocks. Corn stocks would grow to near 1.5 billion in 2012-2013 marketing year. Soybeans have to be adjusted for the unexpected demand which we have received this year due to South American troubles. The potential for lower supplies due to fewer acres than 2012 could create even tighter ending stock for soybeans. An observation from my travels to ND, IA and Southern IL in recent weeks is that farmers have been very busy cleaning up old fence rows and tree lines. How many more acres will that add? Or should we ask how many more bushels will be produced from the same fields?  New trouble for Argentina grain logistics comes from the largest truckers union who called a strike yesterday. This is a normal yearly process to keep revenue in line with cost of inflation. On the livestock side, has cash cattle topped for the season? Historically, the price decline from spring highs to summer lows is between 8 to 19%. This would suggest an average decline could take prices to 114 for cash cattle by summer lows. Product values finally showed some improvement today with choice up 1.83 and select up .85. Pork cutout values were down .41 on Monday. Would you like a daily text update on your cell phone during the trading session? Please let us know your thoughts by sending an email to research@allendale-inc.com.
 
Markets as of 5:10 AM
May Corn    -8 3/4            Apr Cattle -.40        Jun $ Index       +.24
May Beans   -14               Apr Hogs    -.50       April Crude       -.86
May Wheat   -9 1/4            Jun S&P     -7.50      June Gold         -18.20
 
Allendale Advanced Charts
Corn posted an outside bar on the charts on Monday with a bearish close. The markets slipped below the 200 day moving average and the 38% retracement. A lower close on Tuesday could trigger ideas the near-term top is in.

 
Nelson Notes from the desk of Rich Nelson
Friday’s Commitment of Traders release indicated the following changes for Managed Money between March 7 and March 13. Corn -810, soybeans +19,725, Chicago wheat -13,710, live cattle -5, 023, lean hogs -215. Traders may be surprised to see the funds were doing light sales through last Tuesday in corn.
 
 
Contact Allendale: 800-262-7538 research@allendale-inc.comwww.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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