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November 2011 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.
 

Grains Take Back Yesterday’s Gains

Nov 30, 2011

Good Morning! Paul Georgy with early morning comments for November 30, 2011 at 5:20 am. Grain markets are lower overnight as outside market news undermines trader’s confidence. Macro news continues to raise questions as to where should money be invested. The news of Italy’s bonds trading at 8% you would think would be bearish the euro. However traders spun it to be bullish because it wasn’t as bad as they thought it would be. The Eurozone finance ministers have gone begging to the IMF to add more firepower to their bailout fund. Weather in South America is pretty ideal for crop growth. Australia is having problems with too much rain in some areas. This may cause quality problems for wheat which will eventually compete against corn. Argentina Ag Ministry has estimated their corn production at 30 mmt versus the previous record of 22.5 mmt. Delivery intention for December contracts will be released early this morning. Traders are looking for positive news on the Weekly Exports sales report on Thursday morning. Beef product has come under pressure the last few days. Choice was down .98 and select was down .46 on Tuesday. Pork cutout values were down .16 yesterday. Livestock futures will be looking at outside markets for support. Don’t forget to sign-up for the year end special Allendale Research Center for complete coverage of markets.
 
Markets as of 5:20AM
Corn: 4 to 7 lower                Beans: 2 to 4 lower             Wheat: 3 to 5 lower
Live Cattle: 30 to 40 higher                         Lean Hogs: 20 to 40 higher
Dollar: .03 higher                  Crude: .30 higher                  Gold: 1.00 higher
 
Allendale Advanced Charts
The dollar index has established an uptrend. The early Tuesday test of the longterm support with a rebound late was important to maintaining the upward bias. Tuesday’s low will now become critical support. See trade recommendation in Allendale Advance Charts page 9.

Nelson Notes from the desk of Rich Nelson
Winter wheat good to excellent ratings advanced 2% to now 52%. This will be one of the last wheat updates before dormancy. USDA has stopped reported corn and soybean harvest results.

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.

Narrow Ranges in Grains Overnight

Nov 29, 2011

 

Good Morning! Paul Georgy with early morning comments for Nov. 29, 2011, at 5:20 am. Grain markets were relatively quiet overnight. The euro is stronger as EU leaders arrive in Brussels for another meeting. The eurozone problem does not want to go to sleep. Talk of a breakup of the eurozone or the possibility of Germany pulling out sounds like a political bluff. Yesterday the talk was that a solution was in the making. European leaders were in Washington meeting with President Obama. Today back to Brussels to work out the reform and the distribution of the European Financial Stability Facility’s 420 billion euros. One thing is for certain, tensions are increasing and large specs are decreasing position size as reported by the CFTC Commitment of Traders report.

Weekly export shipments were in line with trade expectations. Celeres' weekly export data showed Brazil has sold 38% of the 2011/12 bean crop compared to 36% last year. Agroconsult has estimated the 2011/12 bean crop at 74.8 mmt, which is an increase of 1 mmt from its last estimate. Deliveries for the December contract start tomorrow, with no corn deliveries expected. Cattle futures struggle to close higher on Monday while product slides again. Choice beef was down 0.30 and select down 0.09. Pork cutout was up 0.70 on Monday. Lean hog futures retraced all of last week’s gain in one session.

Don’t forget to sign up for the year-end special Allendale Research Center for complete coverage of markets.
 
Markets as of 5:20AM
Corn: 3 to 4 higher               Beans: 6 to 8 higher            Wheat: 4 to 6 higher
Live Cattle: 10 to 20 lower                          Lean Hogs: 10 to 25 higher
Dollar: .59 lower                    Crude: .80 higher                  Gold: 4.60 higher
 
Allendale Advanced Charts
KC wheat held above last Friday’s low on Monday, but closed near session lows. We have not seen prices this low since July 2010. The next area of support is down at 6.24. See trade recommendation in Allendale Advance Charts, page 9.

Nelson Notes from the desk of Rich Nelson

The Commerce Ministry forecasts soybean imports in November will total 5.63 million tonnes. This would be a good increase over October’s 3.81 million tonnes.

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.

 

Short Covering Rally Supports Grains

Nov 28, 2011

 

Good Morning! Paul Georgy with early-morning comments for Nov. 28, 2011, at 5:20 a.m. Markets rebound on short covering and a risk-on attitude by investors. A dose of "hopium" again boosts the euro against the dollar and yen. Talk of the IMF providing a loan to Italy may provide a reason for a bounce in an oversold market with light volume. The euro has rallied as European leaders work on a framework for the region. There is some talk that funds could be back in the market as November ends and December starts. We are in holiday markets, which usually mean light volume and very choppy price movement. December contracts of corn and wheat are approaching first notice day, where longs need to be out or risk delivery. South America received rain last week with 85% coverage. Another system is expected to move through their growing region within the next seven days. Demand is still the hurdle grain traders have to deal with. Basis in most areas are well above normal. Historically, the strongest basis occurs in early December, when harvest is complete and farmers lock the bin doors until the new year. Ethanol processors have been aggressive buyers of corn in order to take advantage of the blend credit, which is going to disappear on Jan 1. Livestock should open higher in response to outside markets. Cutout values were lower for beef and pork. Check out the end-of-year special for the Allendale Research Center. It is time to get registered for the Allendale Outlook Conference.
 
Markets as of 5:20AM
Corn: 13 to 14 higher                       Beans: 15 to 17 lower           Wheat: 9 to 12 higher
Live Cattle: called higher                             Lean Hogs: called higher
Dollar: .80 lower                    Crude: 3.07 higher                Gold: 29.50 higher
 
Allendale Advanced Charts
Corn finished on a weak note Wednesday, settling into a new low for the move. This brings the price closer to key support at 5.72 1/2, the low from October.

 

 

Nelson Notes from the desk of Rich Nelson
Sales in beans were trending weak before November and may be still weak after November. This is why we had that low price projection that may be filled soon. On top of that, the seasonal facts are not as rosy as the trade’s perception of seasonal...Rich Nelson

 

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.

Happy Thanksgiving from Allendale!

Nov 23, 2011

 

Good Morning! Paul Georgy with early morning comments for November 23, 2011 at 5:00 am. All of us at Allendale want to wish you a Happy Thanksgiving and safe holiday. We have a lot to be thankful for, living in the United States of America. Markets are lower overnight as we approach the holiday. Renewed concern over the bank stability in Europe has the euro under pressure. Macroeconomic influences could have a greater effect on our markets over the next few sessions as US traders take off for the holidays. The news from IMF increasing its coverage of the Eurozone debt was supportive for a short time, until the details were released. It looks like more talk with not a big enough stick. The US congress is headed home and they will be defending their position of inaction on weekend talk shows. Weather forecast is mild for the Midwest through the weekend. South America remains ideal for crop performance. The USDA will release the Weekly Supply and Demand Report on Friday morning. Rich Nelson, Allendale’s Director of Research, completed a study analyzing what corn prices historically do from Thanksgiving until Christmas. Over the last 15 years there were 7 years where prices were higher with an average gain of 21.8 cents. There were 8 years that the price was lower with an average loss of 6.5 cents. The day before and the day after Thanksgiving Seasonal over 15 years had 7 with an average gain of 8.6 cents. Hogs and cattle were higher 10 and 9 times respectively out of 15 years. Beef product values are .49 higher in choice and .20 lower for select. Cash cattle trade has been inactive so far this week. Pork cutout values were down .87 on Tuesday. Normal trading hours today but remember markets close early on Friday. More detail can be found in the Allendale Research Center.
 
Markets as of 5:00AM
Corn: 8 to 10 lower              Beans: 16 to 18 lower      Wheat: 8 to 10 lower
Live Cattle: 40 to 60 lower                          Lean Hogs: 15 to 30 lower
Dollar: .57 higher                  Crude: 1.76 lower         Gold: 10.10 lower
 
Allendale Advanced Charts
Beans finally managed to find a bit of strength late in the session Tuesday. They settled above Monday’s low as well, but we need to see follow-though strength tomorrow to confirm a bottom might be forming.

Nelson Notes from the desk of Rich Nelson
The Department of Commerce revised its estimate of third quarter GDP from 2.5% growth down to 2.0%. This was worse than analyst estimates for 2.4%. Though this is disappointing to many, some economists suggest it is not that bad. Preliminary projections suggest fourth quarter growth, not covered on this report, and could be over 3%.

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.

 

Commodities Retrace Some of Yesterday’s Losses

Nov 22, 2011
Good Morning! Paul Georgy with early morning comments for November 22, 2011 at 5:15 am. Grain markets rebound slightly after several days of lower trade. Confidence and demand are the keys to market direction this week. With the new leadership in Spain, traders are concerned about unveiling more debt than was previously reported. The selling on Monday seems to have been prompted by European fund liquidation as they are reducing risk and repatriating their money. Selling by US funds was driven due to technical and momentum signals triggered by macro uncertainty. We need to see some business by China to provide fundamental support. It seems unlikely as they are harvesting a record corn crop and all immediate needs have been met. Brazil should get some rain this week. Choice beef values were up 1.26 on Monday while select was down .47, pork cutout values were down .27. Markets are expected to be very choppy with more talk about the famous Thanksgiving seasonal which has beans rallying the day before and the day after. Markets are open regular hours on Wednesday, closed Thursday and close early on Friday. Contact your broker for complete details. Happy Thanksgiving to All!
 
Markets as of 5:15AM
Corn: 2 to 3 higher               Beans: 3 to 5 higher             Wheat: 2 to 4 higher
Live Cattle: 0to 10 higher                             Lean Hogs: 10 lower to 10 higher
Dollar: .20 lower                    Crude: 1.29 higher                Gold: 19.40 higher
 
Allendale Advanced Charts
Cattle dipped below the long-term uptrend on Monday but then managed to close above last Friday’s low of 121.45. This may have been a prime buying opportunity. If further strength is seen today, we must keep our eye on some resistance at the previous double bottom at 122.12.

 

 

Nelson Notes from the desk of Rich Nelson
The first half of November saw below normal precip for Brazil. That will lead some to suggest it is the start of La Nina dryness. Our favored meteorologist, Drew Lerner, estimates only peripheral dryness will be seen from the second half of December into January. Yields will be average in South America as areas with good precip offsetting those few areas which are dry.

 

 

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.

 

Super Committee Is Expected To Announce No Results

Nov 21, 2011

Super Committee Is Expected To Announce No Results
Good Morning! Paul Georgy with early morning comments for November 21, 2011 at 5:15 am. Grains are testing lows again this morning. As we look ahead to a holiday-shortened week the macro news will continue to dominate trader’s bias. It appears the US Congressional super committee will not find a solution to budget cuts. As of this morning they are far apart on all proposals. On the Eurozone front, Spain has elected a new leader over the weekend which adds more uncertainty. The weather in South America is good for crop development. Argentina received rain over the weekend and Brazil should receive rain early this week. Demand is probably the biggest concern to traders as they will be watching for any sales announcement from USDA at 8:00 am CST. The CFTC report shows managed money reducing long exposure in commodities. Technical traders will be watching January soybean support at 11.60 area and the seasonal traders will be talking about the historical price rally patterns the day before and the day after Thanksgiving. Choice and select beef price spread narrowed on Friday as choice was down .27 and select values were up 1.27. Pork cutout values were 1.75 higher on Friday. We expect very choppy markets at times with spells of narrow trading ranges this holiday shortened week.
 
Markets as of 5:15AM
Corn—7 to 9 lower                         Beans—9 to 11 lower
         Wheat—6 to 8 lower
Live Cattle—called steady to lower       Lean Hogs—called steady to lower
Dollar— .38 higher                          Crude— 1.43 lower
           Gold— 19.00 lower
 
Allendale Advanced Charts
On Friday January soybeans traded below key support but closed higher on the day. On a holiday-shortened trading week, support at 11.63 1/2, it will be critical to maintain a close above that level.

Nelson Notes from the desk of Rich Nelson
Our biggest interest right now is basis. Not only is this year’s basis extremely strong, but yesterday’s very sharp futures decline made it even better. Normally, basis weakens in December and early January as producers get active on January 1 cash sales. Contact your Allendale representative on discussing selling cash corn and re-owning it with very little cost. Some say getting a fantastic basis, and having potential to capture any upside in prices with no more downside risk, is ideal grain marketing.
 
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.

Money Flow Drives Commodity Markets

Nov 18, 2011

Good Morning! Paul Georgy with early morning comments for November 18, 2011 at 5:15 am. Grains quiet in narrow trading ranges overnight as dollar sees some profit-taking. Grain markets performed like we thought could happen when recent lows were violated on Thursday. Large sell orders were activated at several support points below 6.30 in December corn. Demand seems to have been the match that ignited the selling as USDA Weekly Sales numbers were less than acceptable for this time of year. Thursday price action seemed as if it was fueled by liquidation which started in Europe. France and Spain bond auctions did not go well which caused more selling due to lack of confidence. Weather remains positive for crop performance in South America. The question traders will have to answer today "Was yesterday the beginning or the end of another round of liquidation in commodities"? The weekly close is going to be very important to technical traders. Cash cattle traded 2.00 to 3.00 lower and cutout values had little change on Thursday. Hog futures are driven by expectation of better exports. Contact your Allendale Representative to discuss market opportunities.
 
Markets as of 5:15AM
Corn—0 to 1 lower                         Beans—4 to 6 higher
          Wheat—2 to 3 higher
Live Cattle—5 to 15 lower           Lean Hogs—5 to 20 lower
Dollar— .27 lower                          Crude— .13 higher
             Gold— 8.70 higher
 
Allendale Advanced Charts
Corn dropped quickly on Thursday after breaking two key levels at 6.30 and 6.22. the close was near the 62% retracement at 6.08. We have not seen prices this low since October 11. There could be a short covering bounce on Friday however a lower weekly close could provide more liquidation.

Nelson Notes from the desk of Rich Nelson
This week’s corn sale of 208,900 tonnes (8.2 million bushels) represents the lowest in over 20 years for the second week of November. This is 75% less than the five year average.

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.

Grain Traders Waiting For Sale Confirmation

Nov 17, 2011

 

Good Morning! Paul Georgy with early morning comments for November 17, 2011 at 4:00 am. Comments are a little earlier than normal as I have to catch flight to New York for a NFA Board meeting. Grain markets have been quiet with trading ranges established early in session. The factor providing support to grain markets is demand or the anticipation of demand. It was reported yesterday that China bought 600,000 tonnes of soybeans from the US however we have seen no confirmation. The USDA Weekly sales numbers out this morning at 7:30 will be watched closely. The daily announcement of sales usually is released about 8:00 am. Estimates for sales this week have corn at 250 to 600 tmt, soybeans 450 to 700 tmt and wheat 300 to 500 tmt. We continue to watch weather but South American conditions are near ideal. Ukraine remains the dry spot. Crude oil was the major supportive factor to corn and soyoil yesterday after the announcement of reversing the flow of the pipeline from the gulf to Cushing, OK. We are not going to talk about the macro markets this morning but keep your eye on the dollar index as a directional indicator. As I mentioned yesterday we believe the recent lows in corn, beans and wheat are critical support. A close below these levels could be significant going into the weekend. Cattle are waiting for cash sales this week. Choice beef prices are heading for the $200.00 level. Pork continues to struggle ahead of a usually poor demand week. Call our office or follow us at www.alendale-inc.com if you have any questions.
 
Markets as of 4:00AM
Corn—2 to 3 lower                         Beans—2 to 3 lower
           Wheat—2 to 3 lower
Live Cattle—30 to 40 lower         Lean Hogs—0 to 10 higher
Dollar— .30 higher                         Crude— .07 lower
              Gold— 13.20 lower
 
Allendale Advanced Charts
Corn traded quietly on Wednesday just below the 20 day moving avrage and downtrend. The 6.50 level is becoming key resistance now since the downtrend, 62% and 50 day moving averagge all converge there. Look for support in the low 6.30 area with stops likely building below that level.

 

 

Nelson Notes from the desk of Rich Nelson
Analysis firm, Oil World, is surprised by the soybean to corn acreage shifts in South America this year. They project Argentina will increase plantings 7% from last year’s 4.56 to now 4.87 million hectares. The group suggests a slight contraction in soybean ground from 18.89 million hectares to 18.76

 

 

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 Retrace Tuesday’s Gains on Strong Dollar

Nov 16, 2011

Good Morning! Paul Georgy with early morning comments for November 16, 2011 at 5:10 am. Futures markets are lower with grains taking away half of Tuesday’s gains. Macro market "hopium" had Italy’s new cabinet in place and solving problems which was enough to trigger risk-on buying in the commodity complex Tuesday. Grains found support from rumors of China buying soybeans and soyoil demand in recent days. These headlines came at a time when corn was setting on recent lows and soybean prices near one month lows. Fundamentals are still a bit negative this morning with weather in South America near ideal for getting a crop started. We have been watching soyoil supplies tighten which is driven by bio-diesel producers trying to get as much inventory before blend credit goes away at year end. Export sales numbers will be important this week as demand has fallen behind levels to meet USDA targets. There also is talk about the strong seasonal for price rallies the day before and the day after Thanksgiving. The bottom line is the lows made early this week are critical support and if broken it would open the door for a sharp move lower. Beef cutout values were higher on Tuesday while futures closed the gap between it and cash trade. Pork cutout values were down 1.40. We are expecting more choppy trade as macro news impacts trader’s confidence.
 
Markets as of 5:10AM
Corn—5 to 6 lower                      Beans—9 to 11 lower
                     Wheat—3 to 5 lower
Live Cattle—10 to 15 lower         Lean Hogs—10 to 15 lower
Dollar— .34 higher                       Crude— .57 lower
                     Gold— 8.70 lower
Allendale Advanced Charts
Beans found strength at mid session Tuesday once resistance at 11.90 was breached. The close above 12.00 was positive, but the downtrend remains in place.

Nelson Notes from the desk of Rich Nelson
Analysis firm, Oil World, is surprised by the soybean to corn acreage shifts in South America this year. They project Argentina will increase plantings 7% from last year’s 4.56 to now 4.87 million hectares. The group suggests a slight contraction in soybean ground from 18.89 million hectares to 18.76

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.

Volume Dips As Traders Reduce Risk

Nov 15, 2011

 

Volume Dips As Traders Reduce Risk
Good Morning! Paul Georgy with early morning comments for November 15, 2011 at 5:20 am. Markets were mixed overnight. Are we going to see turnaround Tuesday provide some buying during the session? Traders seem to be keeping risk to a minimum as we approach Thanksgiving holiday. Traders may give Greece and Italy some time to develop new governments and enact their austerity plans. This could quiet the news for a while but the problems are not going away. The bond auctions in Italy and Spain have meant the governments will have to pay more for their borrowings. Not a good path for recovery. The news on the weather front remains the same. South America is in good shape and the southern plains in the US should get more rain this week. The Ukraine crops are still dry going into dormancy. Exports shipments are behind and NOPA crush was at the low end of estimates. Harvest is all but complete as USDA reported soybeans 96% done and corn 93% done. The CFTC Commitment of Traders Report showed funds increasing long positions in corn and decreasing long positions in soybeans. Cattle futures were higher overnight supported by the stronger cutout values, choice up 1.38 and select was up 2.38. Nearby live cattle futures are at a considerable discount to cash. Lean hogs were sharply higher on fund buying in the February contract yesterday. Pork cutout values were down .46 on Monday. We expect the macro markets and headline traders to be the key influence to the agricultural market this week. Use the charts to help with entry and exit points in your trading.
 
Markets as of 5:20AM
Corn—2 to 4 higher                       Beans—12 to 14 higher
                 Wheat—1 to 3 lower
Live Cattle—5 to 15 lower           Lean Hogs—5 to 15 lower
Dollar— .40 higher                                    Crude— .45 lower 
                  Gold— 14.70 lower
 
Allendale Advanced Charts
Once again the dollar index found support at the 38% retracement level and rebounded to close near session highs. This market needs a breakout of the current range 78.40 resistance and 76.70 support. The direction of breakout will likely see some acceleration due to stop being hit.

 

 

Nelson Notes from the desk of Rich Nelson
The only measurement of monthly soybean crush levels, since the US Census Bureau stopped collecting the data, is now the industry organization NOPA. October crush was estimated at 141.179 million bushels. That was slightly less than 142.25 million bushels expected. We remain under the pace needed to meet USDA. September and October crush totaled 12% and 7% under last year. USDA’s thinks total year crush will fall only 1%.

 

 

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.

 

World Eyes on Greece and Italy as Grains are Firm

Nov 14, 2011

 

Good Morning, 
I'd like to take a moment to personally invite you to our 24th annual conference in Crystal Lake, IL on January 20th and 21st. We will feature in depth analysis about many of the topics you read about in the Wake-Up Call every day. We'd like to offer our Wake-Up Call readers an extension of the sale we ran on the ticket price last week which will save you $40.00 off the advertised price. This special will expire on Monday, Nov. 14 at 3PM. Please call Greg or Jeremy at 800-262-7538 to register.
Paul Georgy
Allendale President and CEO
 
Good Morning! Paul Georgy with early morning comments for November 14, 2011 at 5:20 am. Grain futures were higher overnight on short covering. The Eurozone news is waiting for Greece to implement policies to meet the requirement for the EU funding. Italy is working frantically to elect a new cabinet for new government since Berlusconi’s resignation. Traders will be watching the Italian bond auction this week with 7% being the critical level. Portugal released economic data showing they are moving deeper into recession. Weather in South America should be great for planting and crop progress. The Ukraine’s crops are going into dormancy with moisture on the short side. November soybean contract goes off the board today. Grain markets are oversold therefore a rebound could be possible. Cash market basis is suggesting farmers have closed the bin doors, probably until mid-December. We expect headline traders to create choppy markets again this week as the Eurozone will provide the news. The beef cutout values were slightly higher on Friday but will not do much to fill the negative packer margins. Pork cutouts were lower as the retail counter space features turkey. Investor attitude will be focused on the dollar and potential export business.
 
Markets as of 5:20AM
Corn—0 to 1 higher                       Beans—8 to 10 higher
                   Wheat—0 to 1 lower
Live Cattle—called steady higher  Lean Hogs—called steady higher
Dollar— .40 higher                        Crude— .95 lower
                          Gold— 11.70 lower
 
Allendale Advanced Charts
Crude oil continues its climb as the market heads toward 62% retracement, which is near the $100 per barrel level. This market has not remained above $100 for a good amount of time since May.

 

 

Nelson Notes from the desk of Rich Nelson
Using agreements with Ukraine’s Black Sea port of Sevastopol, approximately 100,000 tonnes of Kazak wheat has made it to the facility by rail. Agreements such as this, as well as $40 per tonne government subsidies on exports, will help this landlocked country.

 

 

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.

 

World Markets Show Little Recovery

Nov 11, 2011

Good Morning, 
I'd like to take a moment to personally invite you to our 24th annual conference in Crystal Lake, IL on January 20th and 21st. We will feature in depth analysis about many of the topics you read about in the Wake-Up Call every day. We'd like to offer our Wake-Up Call readers an extension of the sale we ran on the ticket price last week which will save you $40.00 off the advertised price. This special will expire on Monday, Nov. 14 at 3PM. Please call Greg or Jeremy at 800-262-7538 register.
 
Paul Georgy
Allendale President and CEO

The outside markets are providing support to grain markets this morning. The overnight session thus far has been quiet with narrow trading ranges. As we talked about yesterday, the market is shifting from the supply side to the demand side of the balance sheet. The weekly export sales numbers confirmed very weak demand for corn and soybeans. Corn sales have fallen to just 102% of a year ago while soybeans are only 64% of last year’s sales. Without fundamental news we have only the macro markets to lead the money flow confidence. The bond auction in Italy provided "hopium" for the Eurozone. However, in reality, Italy is on the cusp of a potential bailout to which EU leaders say no way. The MF Global bankruptcy trustee has put a deadline on getting customer accounts and positions moved to a new clearing firm. If not moved by this weekend positions will be liquidated. Cash cattle on Thursday traded $4.00 to $6.00 higher in Texas and $2.00 to $4.00 higher in Nebraska. Cutout values were higher as Choice values were up $1.24. However the news from the cash market was not enough to support cattle futures from trader liquidation. Hog futures were dominated by bear spread liquidation. We believe you need to stay in close contact with your Allendale representative. We expect extremely choppy markets with headline traders continuing to lead the charge.
 
Markets as of 5:20AM
Corn—0 to 1 higher                       Beans—5 to 7 higher                      Wheat— 0 to 1 higher
Live Cattle—10 to 20 lower         Lean Hogs—0 to 10 higher
Dollar— .30 lower                          Crude— .38 higher                         Gold— 5.70 higher
 
Allendale Advanced Charts
Corn tried to break though the 50 day moving average early Thursday but instead broke the 20 day moving average support level. Today will be key in setting the stage for next week’s price action. A lower closed will be second day below uptrend since early October.

Nelson Notes from desk of Rich Nelson
A lot has been made about Wednesday’s USDA report for soybeans. Brazil will take the role as top dog in the export market this year. 

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.

Focus Goes Back to the Macro Problems

Nov 10, 2011

 

Good Morning, 

I'd like to take a moment to personally invite you to our 24th annual conference in Crystal Lake, IL on January 20th and 21st. We will feature in depth analysis about many of the topics you read about in the Wake-Up Call every day. We'd like to offer our Wake-Up Call readers an extension of the sale we ran on the ticket price last week which will save you $40.00 off the advertised price. This special will expire on Monday, Nov. 14 at 3PM. Please call Greg or Jeremy at 800-262-7538 register.

Paul Georgy

Allendale President and CEO
 
Good Morning! Paul Georgy with early morning comments for November 10, 2011 at 5:20 am. Overnight commodity markets bounce after Wednesday’s sharp selloff. The USDA report provides support to corn market with the lowering of yield and total production, however now the focus will shift to the demand side of the balance sheet. The USDA raised China’s imports of corn to 3 mmt and raised their production by 2.5 mmt. Price will be an important factor to entice demand as Argentina will likely be a competitor after the first of year. The macro markets are influencing traders’ willingness to accept risk. Greece problems were expected to be solved for a while but the coalition government is not in agreement on accepting EU funding requirements. Italy, the 3rd largest economy of the EU, is in debt trouble and EU leaders say there will be no bailout. The bottom line is the Eurozone problems are not going away soon and will be affecting commodity prices with sharp moves and mostly likely lighter volume. What this means to us is producers have to be prepared to make marketing plans and have orders in place. We expect choppy markets ahead especially with holiday markets and year end not far away. Stay in touch with Allendale Research Center at www.allendale-inc.com. The spread between choice and select beef has narrowed with choice down .43 and select up 1.27. Cash cattle trade is still at a standstill this week. Packer margins remain deep in the red. Pork cutout values continue to slide.
 
Markets as of 5:20AM
Corn—3 to 5 higher                       Beans—1 to 4 higher
                      Wheat— 2 to 4 higher
Live Cattle—30 to 50 higher       Lean Hogs—50 to 1.00 higher
Dollar— .20 lower                          Crude— 1.14 higher
                      Gold— 25.50 lower

 

 

Allendale Advanced Charts
Corn futures exhibited an outside day on the charts. Opening higher and closing lower in the middle of the range gives no clear signal. Trading within key moving averages and holding uptrend gives the bulls hope. A close below Wednesday’s low could activate considerable sell stops and a close above Wednesday’s highs could send us to at least 6.75.

Nelson Notes from desk of Rich Nelson

If it were not for the sharp pressure from outside markets, traders could hold onto this new corn yield number as a bullish point to resonate. This is the lowest since 2003!

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 Get Ready For USDA Numbers

Nov 09, 2011

 

Good Morning! Paul Georgy with early morning comments for November 9, 2011 at 5:20 am. Was yesterday a partial replay of last month when corn futures rallied the day before USDA Report? Will the excitement of the report already been played out? We will have the answers at 7:30 this morning. The trade average estimate for yield is .4 of a bushel less than USDA last month. The corn ending stocks should be lower for US. The real key may be in the adjustments the USDA makes to foreign production. US attachés and government agencies in China, South America and FSU have bumped up production estimates of their crops in recent announcement. The macro markets may overshadow the report. The dollar is sharply higher while stock indexes suggest a lower opening in the Dow. The Greek debt crisis has not been solved and the ball has been put in the Greek government’s court. In order to receive the 8 billion Euros they have to pass a stringent 2012 budget and negotiate the 50% haircut with debt holders in a few weeks. Live cattle futures have found support as cutout values firm and hopes of better cash prices this week. Hog futures continue to break support levels on the charts. Cutout values down 1.52 on Tuesday. Expect volatility in markets that have deteriorating volume. Listen to the Morning Coffee and we will give you our reaction to the USDA Report.
 
Markets as of 5:20AM
Corn—0 to 1 higher                       Beans—9 to 11 lower
                     Wheat— 6 to 8 lower
Live Cattle—15 to 40 higher       Lean Hogs—10 to 20 lower
Dollar— .82 higher                                    Crude—1.50 lower
                         Gold— 15.20 lower
 
Allendale Advanced Charts
Spring wheat took off like a rocket on Tuesday after taking out previous resistance near 9.35. The market didn’t stop until it took out the 62% retracement and the August highs of 9.50. However, the close backed off below 9.50 which was a bit disappointing to the bulls. Tomorrow’s trade will be key as we need a close above Tuesday’s high to keep the bull rolling.

 

 

Nelson Notes from desk of Rich Nelson
Winter wheat planting is 94% complete. Emergence was seen at 76%. Due to recent rains, the good to excellent rating rose by a surprising 4% from last week and is now 49%. This brings it a little closer to the five year average of 57%. USDA is suggesting the winter wheat crop is improving.

 

 

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 Get Ready for USDA Data

Nov 08, 2011

Good Morning! Paul Georgy with early morning comments for November 8, 2011 at 5:11 am. There has been light volume in narrow trading ranges in most commodities overnight. Grain markets are coiling which could make the USDA report tomorrow morning very important to price direction. Traders are expecting corn yields and ending stocks to be lower than last month. Soybean stocks could increase as demand has gone into a tailspin. Trade is expecting an increase of 25 to 70 million bushels in soybeans stocks. Today we will again be watching for headlines out of the EU. Now that the Greece problem has cooled down for a while the focus has moved to Italy. CME is working with MFG’s bankruptcy trustee to get customer segregated monies released and allocated to customers’ accounts at their new firms. They even petitioned the USDA to delay the release of Wednesday’s report and USDA said it will be released on November 9 at 7:30 am. The Goldman roll from Dec corn to Mar corn is providing a chance to roll hedges. Hog futures broke key support areas yesterday with fund liquidation and weak cash markets providing the pressure. Cattle cutout values were higher on Monday with choice up 2.03 and select up .14.
 
Markets as of 5:11AM
Corn—0 to 1 higher                       Beans—3 to 5 higher
                       Wheat— 1 to 2 higher
Live Cattle—40 to 50 higher       Lean Hogs—10 to 20 lower
Dollar— .03 lower                          Crude—.73 higher
                          Gold— 4.10 higher
 
Allendale Advanced Charts
Hogs closed below several key support points on Monday: 50% retracement, last week’s low, and the 40 day moving average. The next support would be the 62% retracement at 84.70 in Dec Lean Hogs. One could argue that a head and shoulders has been confirmed with a downside target near 81.00.

Nelson Notes from desk of Rich Nelson
Traders are preparing for Wednesday morning’s supply/demand report. Analysts expect a drop in corn stocks from 866 to 801 million bushels. Soybean stocks are seen increasing from 160 to 185 million bushels. Wheat stocks are seen decreasing 837 to 819 million bushels.
 

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.

 

EU Headlines Drive Market

Nov 07, 2011

Good Morning! Paul Georgy with early morning comments for November 7, 2011 at 5:15 am. This morning the macro markets are again grabbing the headlines to influence the trades’ decision making. The Greek Prime Minister has agreed to step down and setup an interim government until January elections can be held. It also is anticipated that the new government will have enough votes to accept the EU plan. There was rumor over the weekend that the EU will stop buying Italian bonds until the country makes some policy changes. The CME has lowered margin requirements on initial margins to maintenance margin levels. This was done to help the firms who accepted MF Global accounts which received only a portion of the money from customers’ segregated accounts. Grain fundamentals remain bearish as demand seems to have dried up and world crops are getting bigger. Moisture is falling in the southern plains and South America is getting the spring rains which get a crop off to a good start. We expect to see choppy markets ahead of the USDA November Supply and Demand Report Wednesday morning. The trade average is 147.7 bpa for corn yield and 41.4 bpa for a bean yield. The USDA estimates last month were 148.1 corn and 41.5 soybeans. The livestock futures are expected to open steady lower as the stock markets could influence trader attitude early in the session.
 
Markets as of 5:15AM
Corn—0 to 1 lower             Beans—1 to 3 lower
Wheat— 1 to 2 higher
Live Cattle—Called steady lower           Lean Hogs— Called steady lower
Dollar— .03 higher                                    Crude—.20 higher
Gold— 12.60 higher

Allendale Advanced Charts
Beans backed off from the down trend resistance line on Friday. Initial support crosses at the 62% retracement level of 12.09 ¾. Then support would be last week’s low of 11.90. The short and long term trends are down in Jan beans.

Nelson Notes from desk of Rich Nelson
The Bureau of Labor Statistics reported October job growth totaled 80,000. That was less than the 95,000 increase expected. However, the government made positive revisions to previous data. September job growth was revised from 103,000 up to 158,000. August job growth was revised from 57,000 to 104,000. With positive revisions to previous data, this report will be considered neutral. 

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.

Quiet Markets Ahead Of Economic Data

Nov 04, 2011

 

Good Morning! Paul Georgy with early morning comments for November 4, 2011 at 5:30 am. The grain markets are being strung along by the macro events out of the Eurozone. Today we will be waiting for non-farm payroll this morning at 7:30 (exp. 100,000 new jobs) and a confidence vote out of Greece. There should be lots of news for the headline trader again today. We are looking for the day we can again talk about grain fundamentals that matter. For now it appears the news is more rumors to justify the move. The weather is developing as forecast with South America in great shape and the US southern plains receiving rain early next week. Ukraine still needs some moisture. There has been a survey of the Chinese corn by a leading world inspection group which raises their crop to 189.2 mmt. That would put it 7 mmt above the last USDA estimate. The US Attaché in Brazil raised new crop corn production there to 64 mmt. The cattle futures have been on a rocket ride this week. Funds and traders are looking at potential export business as the reason for the excitement. However, the product markets are not supporting the enthusiasm as choice beef was .17 lower. The pork complex is being pressured from the cash side with product and live markets lower. We expect more choppy action today as headline traders dominate market action.
 
Markets as of 5:30AM
Corn—1 to 2 higher                   
Beans—1 to 3 higher                     
Wheat— 1 to 3 higher
Live Cattle—20 to 50 higher      
Lean Hogs— 0 to 10 lower
Dollar— .03 higher                    
Crude—.67 higher                         
Gold— 7.40 higher

 

Allendale Advanced Charts

The bean market found good support near $12.00 area in the Jan contract the past two sessions. A close below that level would likely accelerate the down trend. However the rebound yesterday near the downtrend resistance line set the stage for a potential move to the $12.84 level. Fridays close will be important to next week’s direction.

 

Nelson Notes from desk of Rich Nelson
The government will release new monthly employment numbers Friday morning. The trade expects non-farm payrolls to have increased by 95,000 last month. That would be near the 103,000 number reported for September. It is still below the 200,000 number that economists suggest is needed to reduce unemployment. The October unemployment rate is expected to be unchanged from September at 9.1%.

 

 

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 Willing to Take on Risk

Nov 03, 2011

Good Morning! Paul Georgy with early morning comments for November 3, 2011 at 5:30 am. Commodities are higher this morning. We will start this morning talking about the fundamentals of the grain complex. Weather in South America remains ideal for planting and crops are getting off to a good start. Southern Plains should receive rain in one of 2 systems moving through late this week and early next week. Informa yield estimates were the same as last month's and higher than USDA. Argentina says they are close to finalizing a deal to ship corn to China. In summary, you would have to say fundamentals are a little bearish now. We will get weekly export sales data at 7:30 this morning. We think the macro markets will still to determine the direction for commodities. Traders this morning have a risk-on attitude. Greece remains at center stage with Merkel and Sarkozy issuing a statement that they want a commitment to meet all the measures before any more financial help will be seen. The G-20 leaders’ meeting is now being watched for a solution to the crisis in the Eurozone. Late yesterday, the bankruptcy judge approved transfer of accounts from MF Global. However there still remains a shortfall of customer segregated funds. Beef and pork cutout values were lower. Cash markets are inactive since Tuesday trade. The dollar is down .13, crude is up .20, gold is up 5.40 and stock indexes are higher.
 
Markets as of 5:30AM
Corn is trading8 to 10 higher   Beans are trading19 to 22 higher  Wheat is trading4 to 6 higher
Live Cattle are trading25 to 50 higher            Lean Hogs are trading0 to 10 higher
 
Allendale Advanced Charts
Corn remains in a sideways trading range with 40 day moving average providing some resistance at 6.53 1/2. Major resistance crosses at 6.61. Support crosses at 6.33. The longer we stay in this trading range it is likely the velocity of the move in the direction of breakout will be significant.

Nelson Notes from desk of Rich Nelson
Chinese feed mills are showing increased interest in the weekly attempts to sell government wheat stocks. The chart here shows yesterday’s sale was the best yet. The Chinese government expects feed wheat to overshadow corn for another month.

 

For more grain and livestock market info, call us at 1-800-2MARKET (262-7538).

 

There is a risk of loss when trading futures and options contracts.

 

Commodities Quiet as EU Leaders Search to Save Deal

Nov 02, 2011

Paul Georgy with early morning comments for November 2, 2011 at 5:05 am. Commodity markets are quiet this morning as we see a little short-covering. The most asked question yesterday afternoon was what happened in the corn futures. The answer comes from our floor contact as he feels it was liquidation by MF Global floor brokers holding the long Dec 12, short Dec 11 corn spread. They were positioned to take advantage of the Deutsche Bank Roll which starts today. Yesterday was the first chance the local brokers who cleared MF Global were able to liquidate their positions. The Dec-Dec spreads moved as much as 10 cents on the close yesterday. The macro markets, MF Global liquidation and Fed Meeting comments will continue to affect the direction of the grain markets. Weather remains good in South America and it look like the Southern Plains will receive some rain late this week. More estimates on what the USDA will say next week on the Monthly S+D report should be seen around 10:30 this morning. The cattle market surged higher as cash traded several dollars higher in Nebraska as packers wanted to buy inventory. Beef cutout values were lower which increases the loss per head by packers. Pork cutout values are down .63. The dollar is down .26, crude is up .29, gold is up 20.10 and stock indexes are slightly lower.

Allendale Advanced Charts

Corn saw a very swift, late session rally yesterday that triggered buy stops once the previous day’s high was hit. The close was above the 38% retracement level and just shy of the 40 day moving average. Overall the markets remains in a sideways range and a close above 6.60 could push prices to the 50 % retracement of 6.75…Monica Moehring from Noblesville, IN office.

Nelson Notes from desk of Rich Nelson

ADM reported quarterly profit numbers. Their oilseed processing unit reported a 28% decline in profits at $221 million. Last year, in the same quarter, profits were $308 million. Given projected levels of soybean crush margins in that time, we are surprised their profit was even that high.

Grain Futures Struggle with Dollar Strength

Nov 01, 2011

Good Morning! Paul Georgy with early morning comments for November 1, 2011 at 5:20 am. Grain markets fall as the dollar surges higher overnight. The risk-off attitude has all commodities showing red this morning. Trading volume was on the lighter side yesterday as the third largest volume clearing firm at CME filed for bankruptcy. The question still remains whether there will be liquation or will positions be transferred to another firm. On the financial front the Fed will be releasing minutes of their meeting on Wednesday, the ECB will hold a news conference on Thursday and the G-20 will meet this week. Important US economic data will be released on Friday. The USDA monthly report next Wednesday at 7:30 AM which is getting a friendly bias as trade will be looking for lower yields and lower ending stocks. South American weather is ideal and Australia is looking for a bumper harvest. Ukraine is still in need of some rain. Corn harvest is 78% and soybeans 87% complete. The livestock traders are looking for help from the stock indexes while waiting for cash to trade this week. The stronger dollar is raising concern over potential exports. The dollar is up 1.06, crude is down 2.09, gold is down 21.90 and the stock indexes are lower.

Corn dipped below the current uptrend today, but managed to settle just above it. This market is consolidating in a range between 6.30 and 6.60. The longer we stay in this range the more accelerated the breakout move…Monica Moehring from Noblesville, IN office.

Nelson Notes from desk of Rich Nelson

Over the weekend, Japan’s finance minister gave orders to intervene in the foreign currency market. They bought the US dollar and sold Yen in an effort to stop "…one-sided and speculative movement". The Yen got to levels not seen since World War II. A rebounding US dollar is negative to energy markets and grains. 

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