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January 2012 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.
 

Change Of Attitude Out Of Europe – Risk On

Jan 31, 2012

Good Morning! Paul Georgy with early morning comments for January 31, 2012 at 5:10 am. Grain futures are higher on a reversal of sentiment out of the Eurozone. The Brussels summit concluded with a new bailout fund called the European Stability Mechanism which will be put in place by July 1. The hopes of a Greek debt plan with private investors will be worked out this week has added to the risk-on attitude this morning. Traders will be watching the results of the Florida primary and US economic data to be released later today. Weather in South America is waning from the spotlight as rains are coming where it is needed and harvest weather has arrived in the north of Brazil. Tight supplies of old crop corn continues to support the market on any retracement in price. However the price relationship between December corn and November soybeans is developing as it own story. The current price relationship between gives about a $400 per acre return advantage to corn when using average yield. You can sharpen your pencil and reduce corn yield by 10 to 15 bushel per acre for second year corn and still return more than a good crop of beans. These are numbers the trade will be analyzing and adjusting before the March 31 Planting Intentions Report. Should you be selling December corn NOW? Cattle inventory report was friendly but near term fundamentals suggest we have some work to do. Product is struggling to move at the retail counter. Dressed weights are heavier week over week and packer margins are deep in the red for several weeks. Choice beef was down 1.25 and select was down .54 on Monday. Pork cutout values were up .65. Call your Allendale Representative Today and take action on your marketing plan. Call 800-262-7538. You can get more details by subscribing to the Allendale Research Center.
 
Markets as of 5:10AM
Corn   +9 to +10                    Live Cattle     +50 to +70                  US Dollar Index        -36
Beans +9 to +10                    Lean Hogs      +50 to +80                  Crude Oil                   +1.58
Wheat +11 to +13                  S&P Index     +8.00                           Gold                            +8.80
 
Allendale Advanced Charts
March soybeans backed off after failing to close above the 100 day moving average. After falling 30 cents on Monday, it now appears we are headed to short-term support near 11.75.
Nelson Notes from the desk of Rich Nelson
Markets are disappointed that after intense negotiations with its creditors since Thursday, no agreement has been made. No agreement is expected in time for today’s EU finance minister meeting either. Again, we hear continued talk that an agreement will be made "soon" but the trade is now becoming concerned. A lower Euro, and higher US dollar, is bearish to commodities.
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.

Commodity Prices Slip Ahead of EU Summit

Jan 30, 2012

 
Good Morning! Paul Georgy with early morning comments for January 30, 2012 at 5:00 am.Grain futures are starting the week lower as money flow takes a risk off attitude. The Euro Summit in Brussels brings the focus back to the European debt crisis. Spain’s released a shrinking GDP number this morning. China returns from holiday with no new financial policy. Cash corn markets are starting to see basis setback after several weeks of improvement. We will be watching basis closely this week as it should provide an indication for the direction in futures. The commitment of traders report showed managed money reducing their long position in corn last week by more than 14,000 contracts. They increased long positions in soybeans by 11,000 and increased their short positions in wheat by 5,000 contracts. Drew Lerner World Weather Inc says; "Sufficient rain will fall over the coming week to further reduce Argentina crop stress. Crop conditions will likely improve with the soon to be reproducing soybeans, late corn and sorghum to benefit most from the next two weeks of rain." USDA released Cattle inventory report on Friday afternoon can be looked as a little positive. The beef heifer replacement number was a surprise. The message for this report is that beef production for the next year will tighten even more than previously thought. Expansion has started and will slow the decline in beef production set for 2013. Beef cutout values were lower on Friday. Choice was down .49 and select was down .65. Cash cattle traded at 124 on Friday afternoon which was 2.00 less than last week. Many feedlots passed with ideas for higher prices this week. Pork cutout values were down .03. Get more details on the Allendale Research Center and watch the Morning Coffee Video at 8:00 am this morning at www.allendale-inc.com. Subscribe today!
 
Markets as of 5:00AM
Corn   -4 to -5                                    Live Cattle     called lower                US Dollar Index        +35
Beans -12 to -13                    Lean Hogs      called lower                Crude Oil                   -52
Wheat -4 to -7                        S&P Index     -7.75                            Gold                            -12.30
 
Allendale Advanced Charts
Corn futures closed the week near the 100 day moving average. We are now caught in a range between the 100 day and the steep uptrend support line. Watch for a close out side of the range for a significant move in direction of breakout.
Nelson Notes from the desk of Rich Nelson
The Commerce Department revised fourth quarter 2011 GDP from its previous estimate of +1.8% up to +2.8%. While this is an improvement, and represents a rebounding economy, the trade was expecting a revision to +3.0%. Economists would suggest the market’s expectation was a little too aggressive. It would also back up Bernanke’s more cautious comments noted in this week’s press conference.
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.
 

Dollar Weakness Provides Tailwind

Jan 27, 2012

Good Morning! Paul Georgy with early morning comments for January 27, 2012 at 5:40 am. Grain futures are mixed as traders adjust positions after a volatile week. The rally in commodities the last few days is being called the Bernanke Bounce. The Fed policy announcement to keep the zero interest rate policy in place until the end of 2014 had traders willing to move money to riskier investments. Cash markets are still very firm in some areas in central IL however we are hearing a few ethanol plants have already lowered basis by 5 to 10 cents. We are skeptical of this 6 day rally in nearby corn. Once the end user gets enough supply to cover needs cash markets will likely setback until we find some export interest. Weather forecasts for Argentina and Southern Brazil have increased rain amounts. The delay of export shipments out of Brazil and Argentina will pick once harvest get in full swing and port problems are resolved. The macro influences will continue to push grain futures around as money flow swings with sentiment. The talk of QE3 seems like a wild card for the Fed. Throwing money into the system now would accelerate commodity price and defeat the purpose. The price relationship between 2012 corn and soybeans is weighted heavily to planting corn. That has some producers wondering "Why plant any beans?" Watch the spread between Dec 12 corn and Nov 12 beans over the 6 to 8 weeks. There likely will be some action in that spread before March 31 Planting Intention Report. Maybe we don’t need any more beans with the way USDA is increasing the 2011/2012 beans ending stock on the monthly S+D reports. The cash cattle trade is at a real stand off this week with packer bids at 120 to 122 and feedlots asking 126 to 128. Who will cave first? Packer margins are estimated to in the red over $100. Daily slaughter has been reduced and product still struggles at the retail counter. Choice beef was down .23 and select up .46 on Thursday. I am sure feedlots would move cattle at steady money if they could get it. Pork cut was down .88. Could the rally in meat prices and consumers getting their credit card bills from the holiday spending spree taking its toll on retail demand? Get more details on the Allendale Research Center and watch the Morning Coffee Video at 8:00 am this morning at www.allendale-inc.com. Subscribe today!
 
Markets as of 5:40AM
Corn   +3 to +5                      Live Cattle     +20 to -20                   US Dollar Index        -24
Beans +1 to +2                      Lean Hogs      +20 to +40                  Crude Oil                   +41
Wheat -1 to -2                        S&P Index     +2.25                           Gold                            -4.30
 
Allendale Advanced Charts
Cattle backed off of early highs and settled near key support at 127.80. Critical support crosses at 126.10 to remain in an uptrend.
Nelson Notes from the desk of Rich Nelson
The weekly ethanol production report was considered positive. Production in that week totaled 934,000 barrels per day. Though it was lower than the previous week’s 941,000 bpd pace, it was better than expected. YTD production is 3.0% higher than last year. USDA looks for the year total to use 0.4% lower 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.

Fed Monetary Policy Supports Grains

Jan 26, 2012

Good Morning! Paul Georgy with early morning comments for January 26, 2012 at 5:20 am. Grain futures are higher as risk-on money flow attitude continues. Cash markets continue to move higher as gulf basis has not been this strong since July. At what price will the farmers start selling? There has been talk that it will take a move above 6.50 in March futures for corn and above 12.50 in March beans to pry open the bin doors. Option expiration could impact grains going into the final trading day on Friday. There is a sizeable open interest in 640 and 650 strikes. Weekly ethanol production was 934,000 barrels per day last week. The new number was 1% over last year at the same time but less than last week. Bernanke’s announcement of the extension of the Zero Interest Rate Policy through 2014 has traders concerned about inflation. This provided buying in commodities across the board. The USDA will release the weekly export sales at 7:30. The estimates are for strong sales numbers: wheat 450 to 750 tmt, corn 600 to 1,000 tmt, soybeans 720 to 1,100 tmt. Funds have been adding to long positions in corn and soybeans. Watch for short covering in wheat as nearby futures test down trend chart resistance. Cash cattle markets are still in a standoff with packer bids at 120 to 121. Last week cattle traded at 126. Packers are finally trying to stand their ground as negative margins have exceeded the $100.00 mark. Product is creeping higher even with the slowdown in slaughter. This is giving us reason to believe product could be backing up. Choice beef was up .65 and select was up .64 on Wednesday. Pork cutout values were down .56. Lean hog futures are being supported by the historically wide spread of cattle over hog prices. Get more details on the Allendale Research Center and watch the Morning Coffee Video at 8:00 am this morning at www.allendale-inc.com.
 
Markets as of 5:20AM
Corn   +7 to +8                      Live Cattle     +02 to +10                  US Dollar Index        -43
Beans +9 to +19                    Lean Hogs      +05 to +40                  Crude Oil                   +83
Wheat +8 to +11                    S&P Index     +3.50                           Gold                            +18.90
 
Allendale Advanced Charts
Beans failed to take out the 100 moving average again on Wednesday. There is a solid short term uptrend in place, but is it enough to push past this moving average? If so, a test of the 38% retracement of 12.46 would be next target.
Nelson Notes from the desk of Rich Nelson
Private analysis firm, SovEcon, estimates Russian grain exports totaled 19.5 million tonnes by mid-month and will be over 20 mt by month end. This has traders believing the Russian government could impose tariffs on exports by April. The Russian government has previously indicated exports should not grow larger than 23 – 25 mt tonnes this marketing year. This could lessen the amount of cheap feed wheat hitting the market.
 
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.

Risk-on Money Flow Buying Supports Grains

Jan 25, 2012

Good Morning! Paul Georgy with early morning comments for January 25, 2012 at 5:25 am. Grain futures are holding yesterday’s rally in spite of a higher dollar and lower crude prices. The rumor of Argentina shutting off corn exports because of the drought has been denied by the Argentina Ag Ministry. The rumor of Russia putting a tariff on exports seems unlikely unless food inflation spikes higher there. However exports out of Russia should slowdown due to tight supplies and an increase in domestic demand. Cash markets are strong and end users are finding it difficult to pull grain away from the farmer even with the seasonal record high basis. The delay in Brazilian soy harvest is putting support under the nearby futures. The port problems in Argentina and the harvest delay in Brazil have a considerable line of boats waiting to be loaded. The increased demand for grain at the Gulf suggests some fill-in demand has shifted to US. Argentina received rain of .25 to 2.00 over 80% of crop growing area. The rain system is moving into southern Brazil. Another system with good rains is forecasted for next week. Crop insurer paid out a record $9.1 billion in indemnities on US crops in 2011 while totals could rise to $10 billion by the time all claims are settled. The previous record claims were $8.7 billion. Cash cattle trade is at a standstill while choice beef was up .68 and select was up 1.00. Live cattle futures are testing November highs. Pork futures were affected by spreading due to corn strength. Pork product values were down .54. Subscribe to the Allendale Research Center for more analysis or call us at 800-262-7538.
 
Markets as of 5:25 AM
Corn: 4 to 5 higher               Beans: 2 to 3 higher            Wheat:3 to 5 higher
Live Cattle: 30 to 40 higher                         Lean Hogs:70 to 1.00 higher
Dollar: .32 higher             Crude: .69 lower                       Gold: 9.20 lower
 
Allendale Advanced Charts
The corn market didn’t waste much time trading lower on Tuesday after it found support at the 50 day moving average. The back off on the close could be a signal that the rally was a little too much too fast.
Nelson Notes from the desk of Rich Nelson
One thing getting a lot of discussion in the industry is corn basis. Our models show current basis for Central Illinois is running 19 cents stronger than usual. Producers are cash rich from 2010 crop sales, we have a tight crop, and ethanol plants are still buying. We look for basis to remain strong into April or so. Once we get closer to planting this large new crop, don’t be surprised if basis does not follow the 2011 crop basis pattern.
 
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.

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
 
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.

Monday Money Flow Pumps Up Grains

Jan 23, 2012

Good Morning! Paul Georgy with early morning comments for January 23, 2012 at 5:15 am. Grains are higher. This is the sixth week in a row that grain prices were higher on the first trading day of the week. However the last 3 weeks there were sizeable dips during the middle of the week. World Weather Inc says; "Today’s forecast promotes rain across most of Argentina today and Monday with the rain lingering behind on Tuesday in the far north only. Most of the rain will be light to moderate and sufficient coverage will occur to induce a further improvement in topsoil moisture. The improvement will include the central areas in Argentina that were missed by rain during the weekend." Greece and private debt holders could not come to an agreement. The EU Financial Ministers will meet today to decide on what level of restructuring they will accept. The deadline for a sizeable payment by Greece is on the horizon. The USDA Cattle on Feed report released on Friday was in line with trade estimates. On Feed came in at 103%, trade was expecting 103.3%, Placed was 94% of a year ago and trade was expecting 94.2, Marketed was 98% with average estimate of 97%. The report should not have a long last effect on futures this morning. Choice beef was up .46 and select was up.32 on Friday. Pork cutout values were up .87 and futures could see a firmer opening. Thank you to all who attended the

Allendale’s Ag Leaders Conference

for your very positive comments. Drew Lerner from World Weather Inc gave an outstanding presentation with details on how weather could affect crops in the US in 2012. We want to thank our sponsors AgriGold Seeds, CME and MGEX for their support. Next year will be our 25

th

Annual Outlook Conference. Should be an extraordinary event! Details will follow. Hope to see all of you there.

 
Markets as of 5:15 AM
Corn: 6 to 7 higher               Beans: 13 to 15 higher        Wheat:7 to 8 higher
Live Cattle: called steady higher                 Lean Hogs:called steady higher
Dollar: .33 lower             Crude: .69 higher                       Gold: 12.60 higher
 
Allendale Advanced Charts
Bean rallied into the close on Friday and settled above some minor resistance at 11.95 from some recent lows in late Dec/early Jan. There is still a downtrend in place here so we can’t get too bullish.
 
Nelson Notes from the desk of Rich Nelson
The International Grains Council raised its forecast for world corn production from 853 to 861 million tonnes. World wheat production was similarly raised from 683 to 690 million tonnes.
 
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.

Grains Lower And Allendale Conference Starts At Noon Today

Jan 20, 2012

 

Grains Lower And Allendale Conference Starts At Noon Today
Good Morning! Paul Georgy with early morning comments for January 20, 2012 at 5:20 am.Grain futures are lower overnight as traders take profit. The macro markets are influencing commodities this morning as dollar is stronger and crude is weaker. Cash corn and soybean markets remain strong as grain merchandisers try to pry grain away from farmers. News wires were reporting on Thursday that China may have bought up to 20 cargoes of beans over the last 2 weeks. The only confirmation of a sale by USDA was 120 TMTs to China yesterday morning. The USDA will release the weekly export sales at 7:30 this morning. Estimates are wheat 350-600 TMT, corn 500-850 TMT, and soybeans 500-900 TMT. Buenos Aires Cereal Exchange reports that Argentina farmers have resumed planting corn and soybeans after recent rains. The Argentina Ag Ministry now projects corn planting of 5.0 million hectares versus previous estimate of 4.90. Drew Lerner will be in the house this afternoon to give those present a complete forecast of 2012. The G20 meeting in Mexico will end today. The ideas that the IMF is asking for $500 to $600 billion to boost their rescue plan for the PIIGS has caused hope in the EU. Trade is also watching Greece’s negotiation of debt with creditors. Watch news wires for results. Overnight futures are higher as the spread between choice and select beef is narrowing. Choice was down .99 and select was up .78 on Thursday. Futures posted a strong performance yesterday as traders believe cash trade will be higher again this week. Packers have cut back on daily slaughter which suggests fed supplies are very tight. Pork cutout values were down .56 on Thursday. Futures regain most of Thursday’s losses overnight. Hope to see everyone at the Allendale Ag Leaders Conference today.
 
Markets as of 5:20 AM
Corn: 2 to 3 lower                Beans: 5 to 7 lower  Wheat:0 to 3 lower
Live Cattle: 1.25 to 1.50 higher                   Lean Hogs:50 to 75 higher
Dollar: .17 higher     Crude: .62 lower                   Gold: 8.10 lower
 
Allendale Advanced Charts
March feeder cattle contract has a strong uptrend in place with new contract high posted on Thursday. The lower green up trend support line should be import technical support. A close below that line could signal a sharp sell-off.
 
Nelson Notes from the desk of Rich Nelson
The International Grains Council raised its forecast for world corn production from 853 to 861 million tonnes. World wheat production was similarly raised from 683 to 690 million tonnes.
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.

 

 

Talk of China Buying Supports Nearby Beans

Jan 19, 2012

Good Morning! Paul Georgy with early morning comments for January 19, 2012 at 5:14 am. Grain futures are higher as risk-on buying provides support. There also is talk of China buying several cargoes of beans which is providing support to the nearby soybean futures. We are seeing cash markets strengthen compared to futures by as much as 8 cents in some areas. Libya bought wheat from Russia yesterday. Today, we have jobless claims at 7:30 and EIA releases Nat Gas storage at 9:30. Export sales will be out on Friday morning due to the holiday on Monday. The dollar has been under selling pressure as IMF hopes to raise more money for the support of PIIGS. A G20 meeting will be held in Mexico today and Friday. The US Dollar Index price chart shows the long-term uptrend being broken overnight. A close below that level could have a positive impact on commodities. Beef cutout values were mixed on Wednesday with choice down .37 and select up .34. Packer margins are well in the red. Cash has not traded this week but offers are 125 and higher. Nearby cattle futures tried to fill the gap left from Tuesday but fell short. Yesterday’s low will now become support. Pork product continues to grind higher as cash markets are firmer. Futures appear to have made a seasonal bottom and could work higher into February. Look for good support on setbacks. Allendale’s Ag Leaders Conference is only a day away. Hop in your car and drive over to Crystal Lake IL. We will find you a room at the Hampton Inn in McHenry, IL. See you Friday at noon.
 
Markets as of 5:14 AM
Corn: 3 to 4 higher               Beans: 6 to 8 higher            Wheat:4 to 5 higher
Live Cattle: 10 higher to 10 lower                           Lean Hogs:10 to 20 higher
Dollar: .32 lower    Crude: 1.03 higher                 Gold: 4.50 higher
 
Allendale Advanced Charts
KC wheat fell sharply after breaking Friday’s low. The 40 day moving average proved to be a solid resistance level. Next support sits down at the December low of 6.35 ¼.
 
Nelson Notes from the desk of Rich Nelson
Argentina will be dry this week. We will point out Monday’s system, originally forecast for .25 to .75 inch has been increased slightly to .40 to 1.00 inch. Coverage is still seen widespread with 80% coverage. Dry weather is seen resuming after this system.
 
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.

Grain Futures Give Back Gains

Jan 18, 2012

Good Morning! Paul Georgy with early morning comments for January 18, 2012 at 5:21 am. Grain futures are lower overnight as traders give back some of yesterday’s gains. As for weather in South America, Drew Lerner from World Weather Inc has commented: "The bottom line in Argentina allows timely rainfall back across the nation late this week and into early next week. The predicted rainfall should be sufficient to slow or stop the declining moisture trend and offer a short term improvement to topsoil moisture once again. Subsoil moisture levels will remain low. Once the event passes, a return to drier biased conditions may resume in eastern parts of the nation. In southern Brazil, the bottom line calls for no prolonged period of dry weather. Timely rainfall in the south will help prevent the region from getting as dry as it once was with the exception of western and southern Rio Grande do Sul which is still quite dry. Too much moisture is still a concern for crop areas from Sap Paulo into Goias and southern Minas Gerais for the coming ten days." You will get the 2012 growing season forecast for the US on Friday afternoon at the Allendale Ag Leaders Conference. Hope to see you there. The marco market short covering of the euro provided support across the commodity complex on Tuesday. The EU financial situation is mostly talk with not much action. It is expected to influence prices for some time. Beef cutout values declined on Tuesday on heavy offering. Choice was down .81 and select was down .95. Pork product was .48. Livestock future closed strong on Tuesday can we get follow through to suggest we are working on a seasonal rally?
 
Markets as of 5:21 AM
Corn: 2 to 3 lower                Beans: 8 to 9 lower Wheat:3 to 4 lower
Live Cattle: 20 to 30 higher                                      Lean Hogs:10 to 30 higher
Dollar: .39 lower    Crude: .68 higher                   Gold: .80 lower
 
Allendale Advanced Charts
After a 60 cent decline in price in just 2 sessions, March corn opened strong only to put in a weak close. Support crosses at 6.00 area. A close below that level could trigger a move to 5.77. First level of resistance is near 6.20 today.
 
Nelson Notes from the desk of Rich Nelson
Corn production was raised by 48 million bushels. This was a surprise as the industry was expecting a 45 million bushel decline. A moderate 50 million bushel increase for old crop exports helped cushion the blow for almost no change in projected ending stocks for Aug 30, 2012. We will point out old crop stocks counted, as of Dec 1, were 251 million bushels above the average guess. This implies first quarter usage was disappointing (likely feed use)…again.
   
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.

Grain Futures Move Higher after Long Weekend

Jan 17, 2012

 

Good Morning! Paul Georgy with early morning comments for January 17, 2012 at 5:17 am. Grain futures rebound due to oversold conditions after USDA report. Now that the USDA numbers are out of the way trade will be back focusing on the EU debt concerns, possible Greek default and weather in South America. The Commitment of Traders report from the CFTC showed funds increased their long positions by a sizeable amount in corn and beans. Rains in Southern Brazil this past weekend were beneficial but Argentina will have a period of dryness until Jan 23 when the next system is expect to dump significant moisture over the region. Temps are not expected to be extreme during this spell of dryness. Southern Brazil is starting to harvest early season corn. Yields are coming in less than last year due to the drought in that area. The USDA reported cattle trading in Texas and Kansas Friday at 123.00 which would be 2.00 to 3.00 higher than last week. That was definitely a supportive factor to CME Futures on Friday. Choice beef was down .41 and select was down .54 on Friday. Pork cutout values were up .60. Due to holiday on Monday it is expect cash hogs will start out this week lower as packers have a short week. There are only a few days left to pre-register for the Allendale Ag Leaders Conference. Joel Hertz and Drew Lerner will be our featured speakers at this year’s conference. We have seats available for the meeting but the Holiday Inn is sold out. Rooms are available at the Hampton Inn just down the road. Shuttles will be provided.
 
Markets as of 5:17 AM
Corn: 8 to 10 higher            Beans: 20 to 22 higher        Wheat:7 to 9 higher
Live Cattle: called higher                             Lean Hogs:called higher
Dollar: .66 lower    Crude: 2.09 higher                 Gold: 34.70 higher
 
Allendale Advanced Charts
Beans trended lower as the session progressed on Friday and finished well below the 50 day moving average. However the market did hold above yesterday’s low of 11.50. Watch for the gap below as a magnet with potential downside target of 11.04 as support.
Nelson Notes from the desk of Rich Nelson
Corn production was raised by 48 million bushels. This was a surprise as the industry was expecting a 45 million bushel decline. A moderate 50 million bushel increase for old crop exports helped cushion the blow for almost no change in projected ending stocks for Aug 30, 2012. We will point out old crop stocks counted, as of Dec 1, were 251 million bushels above the average guess. This implies first quarter usage was disappointing (likely feed use)…again.
 
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.

 

Shock Subsides, Buyers Return

Jan 13, 2012

Good Morning! Paul Georgy with early morning comments for January 13, 2012 at 5:20 am. Grain futures are higher this morning after yesterday’s sharp sell-off. The USDA numbers released on Thursday morning had traders in shock and liquidating long positions in all grains. As we talked about many times in our comments in recent days the January report is a time to expect the unexpected. Although some might be convinced the data is inaccurate, this is the basis for fundamental calculations throughout the next year. The expanded limits to 40 cents in corn helped relieve the selling pressure. We have today’s trading session to find an equilibrium value before going home for another long weekend. Markets will be closed on Monday for the observance of Martin Luther King Day. Now that the report is out of the way we will go back to focusing on the weather in South America and the financial crisis in the EU. Drew Lerner from World Weather Inc suggests; "The bottom line in Argentina allows some rain to develop briefly late this coming weekend and early next week in a small part of the nation and then net drying will resume into Jan. 20. Net drying will occur prior to Sunday, as well. The few showers and thunderstorms expected in the middle of the two drier periods followed by another rain event Jan. 23-27 suggests Argentina crops will not get back to the same level of distress noted previous to this week’s rain. Crop conditions will either continue to improve or remain at status quo. Timely rainfall will still be very important since some crop areas in Argentina are still carrying limited subsoil moisture." You will get all the details on South America and the outlook for the US 2012 growing season on January 20 at the Allendale Ag Leader Conference. Ask Drew in person your weather questions. The Italian bond auction success has pressured the dollar on Thursday. This morning we are seeing some short covering ahead of the weekend. Box beef prices got hit gain on Thursday as choice was down 2.22 and select was down 1.03. The larger slaughter this week is creating more meat which has to be moved. Cash cattle trade has been at a standstill for the week. The weaker cutout has packers tougher to deal with. Pork cutout was higher on Thursday. Hog futures were dominated by bull spreading. Cheaper corn prices put pressure on the deferred contracts and nearby futures rallied on herd expansion which means less market hogs. Today should be an interesting session ahead of long weekend. Stay tuned to Allendale research for updates by following us on Twitter. Only a few chance to get tickets to the Allendale Ag Leaders Conference. Call Today!
 
Markets as of 5:20 AM
Corn: 0 to 1 higher               Beans: 2 to 3 higher            Wheat:3 to 4 higher
Live Cattle: 15 to 20 lower    Lean Hogs:30 to 40 higher
Dollar: .08 higher     Crude: .18 higher                   Gold: 5.60 lower
 
Allendale Advanced Charts
The February Crude Oil had a large trading range on Thursday engulfing nearly the entire price movement of the last 3 weeks. Support crosses at the 50 day moving average and the uptrend support line 98.50 area. The first resistance crosses at 103.28 and then at 105.36.
 
Nelson Notes from the desk of Rich Nelson
Corn production was raised by 48 million bushels. This was a surprise as the industry was expecting a 45 million bushel decline. A moderate 50 million bushel increase for old crop exports helped cushion the blow for almost no change in projected ending stocks for Aug 30, 2012. We will point out old crop stocks counted, as of Dec 1, were 251 million bushels above the average guess. This implies first quarter usage was disappointing (likely feed use)…again.
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.

Waiting for USDA Report

Jan 12, 2012

Good Morning! Paul Georgy with early morning comments for January 12, 2012 at 5:15 am. Grains are in a nervous quiet trade ahead of the 7:30 USDA Report. Things to consider going into the final hour of trading before USDA report: 1.) most of Brazil’s soybean producing area is receiving adequate moisture. 2.)Argentina soy crop received some rains in past few days. 3.) Corn and soybeans have rallied 75 cents and 1 dollar respectively off of December lows. 4.) Ethanol credit is gone therefore will industry continue to over produce mandate? Where will demand come from to consume this supply? Corn production at trend yield for 2012 US corn will increase. Can corn put together 3 years in a row below trend yield? The US dollar is posting new highs on EU financial concern. Will the funds pull back their investments in commodities? And the toughest question of all. Can you stand being wrong as this report has a history of sharp post report moves? The grain markets close at 7:15 CST there may be time to reduce risk. Beef cutout values were lower on Wednesday, choice down 1.23 and select down 1.39. Larger weights and increased slaughter is causing pressure in product. Pork cutout values were .46 lower. Cattle futures will also be influenced by the grain data this morning. The hotel where the Allendale Ag Leaders Conference will be held has told us they have filled up. There are rooms available at the Hampton Inn in McHenry and shuttle service will be provided. Call our office at 800-262-7538 if you have any problems and we will help get it worked out. Ask for Greg or Jeremy. We will be giving you an update on the report on the Allendale Morning Coffee around 8.00 am.
 
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
Beans gave back the majority of their gains from Monday on Wednesday. The market managed to hold above the key 12.00 level for the close. Resistance remains up near 12.45 wher the 38% retracement and the 100 day moving average converge.
 
Nelson Notes from 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.
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.

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 Allendale Ag Leaders Conference is less than 10 days away. Get your reservations in TODAY! Call 800-262-7538.
 
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.
 
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.

 

More Rain Added for Next Week in South America

Jan 10, 2012

Good Morning! Paul Georgy with early morning comments for January 10, 2012 at 5:15 am. Grain futures give back early gains overnight. Rains should cover 85 to 90% of Argentina during the next few days as the current systems drops .2 to 1.50 with locally 3.00 inch amounts. The concern of Drew Lerner of World Weather Inc (who you can meet in person at the Allendale Leaders Conference on Friday Jan 20) is the ridge which develops on Friday. Euro and GFS models are now increasing the chance of moisture mid next week. The answer to how much rain develops next week may depend on the actual amounts Argentina receives this week. In two days we have a major USDA report. The results of this data will likely result in a sharply higher or sharply lower close on Thursday. Traders are expecting the USDA to reduce production in corn, increase usage and therefore lower ending stocks by an average of 99 million bushel, down to 749 million bushel from 848 million bushel last month. Wheat stocks are expected to be lower by 36 million bushel and soybeans are expected to be higher by 3 million bushel. Another data point to be watching is the winter wheat seeding. Traders are looking for an increase in total wheat acres but soft red winter wheat could be 787,000 acres less than last year. This loss is estimated because of the late corn and bean harvest in the Ohio River Valley. Those acres will likely go to corn or soybeans in April and May. The Euro macro situation has slowed the intensity of money flow as German and French leaders are working on a resolution to crisis. Funds were a big player in the corn and wheat yesterday on the close. Cattle weights are increasing and slaughter should be getting back to normal work days. Choice beef was down .52 and select was up .35. Packers will most likely wait until late week to show their hand. Pork cutout values were up .87 on Monday. The unseasonable warm weather in livestock producing areas should allow producers to send larger animals to market with better feed efficiency. Even more reasons for adjustments by USDA on Thursday’s report. Keep in touch with Allendale advisors so you can get positioned ahead of report. Only a few days until the Allendale Ag Leaders Conference, Hope to see you there.
 
Markets as of 5:15 AM
Corn: 0 to 1 lower                Beans: 5 to 7 lower  Wheat:3 to 5 lower
Live Cattle: 10 to 20 higher    Lean Hogs:30 to 40 higher
Dollar: .28 lower     Crude: 1.63 higher                  Gold: 24.40 higher
 
Allendale Advanced Charts
The February Live Cattle found support where the uptrend and the 62% retracement converged. The close was neutral, but this may have been the buying opportunity we have been waiting for. Check the recommendations page on the Allendale Research Center.
 
Nelson Notesfrom the desk of Rich Nelson
Just as important to the changes on the US balance sheet for corn on Thursday, will be world numbers. This will include changed for Argentina. The average trade guesses calls for a decline from 127.2 million tonnes to 123.5.
 
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.

Ridge May Build Again in Argentina

Jan 09, 2012

 

Good Morning! Paul Georgy with early morning comments for January 9, 2012 at 5:15 am. Grain markets are higher as traders are waiting for the rain in Argentina to materialize and for the USDA Report on Thursday morning. The weekend temperatures in Argentina were upper 90’s to low 100’s. The rain event that the farmers in Argentina have been waiting for should begin today through Wednesday. Rain totals of .80 to 2.00 inches are expected with locally 3.25 inches in crop growing areas. The trade is already concerned about what kind of moisture will follow. The European Model run is suggesting a high pressure ridge moving back in across Argentina later this week. The USDA report on Thursday promises to be a dandy. There will be adjustments in crop production, quarterly grain stocks, supply and demand and winter wheat seeding. The past five years have proved that it is difficult to outguess the USDA on this report. Rich Nelson’s study of price movement from the close on the day before to the close of the day of the report has been very significant in recent years. In 2009 and 2010 corn prices were limit down. In 2011 corn prices were up 24 cents. We are suggesting to producers to get some 2012 corn priced ahead of this report and use option strategies to allow you to benefit on rallies. Call your Allendale Advisors today. Sign up today for the Allendale Ag Leaders Conference. Cash cattle traded on Friday at steady to 1.00 lower than last week. Product was down on Friday with choice off 1.20 and select down .68. Pork cutout was down .27. The weather condition throughout the Midwest and plains has been excellent for livestock rate of gain. This is putting pressure on product as meat supplies grow. Seasonals suggest prices should strengthen over the next several weeks. Technicals are telling a different story.  
 
Markets as of 5:15 AM
Corn: 6 to 8 higher               Beans: 9 to 11 higher          Wheat:10 to 12 higher
Live Cattle: steady to .20 lower                                Lean Hogs: steady to .20 lower
Dollar: .14 lower                    Crude: .49 lower                   Gold: 1.50 higher
 
Allendale Advanced Charts
After failing to close above the November high two sessions in a row, the crude oil closed the week on a weak note. Overall the market remains in an uptrend, but struggles with resistance.

 

 

Nelson Notesfrom the desk of Rich Nelson
The Bureau of Labor Statistics reports December employment grew by 200,000 jobs. That beat expectations of 150,000. A moderately improving US economy may be bullish to the US dollar. This could pressure commodities.
 
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.

 

Macro Market and Weather Battle for Influence

Jan 06, 2012

 

Good Morning! Paul Georgy with early morning comments for January 6, 2012 at 5:30 am. Grain markets are mostly higher overnight. Stock markets in Europe are higher and weather in South America is waiting for rain. Macro markets took center stage on Thursday as Italian banks were under pressure when their stock had to be halted from trading. Deutsche Bank and Commerzbank lost more than 4% due to liquidity concerns. The US will release unemployment data at 7:30 this morning. The macro market news will be a market mover for some time.
 
Argentina’s forecast for wet weather the 9th through the 12th should relieve crop stress in most areas. However it will not be soon enough for some crops. The next few days will intensify crop stress as dry conditions with high heat persist. Once past this rain event it looks dry again but temps should be more seasonal. The Climate Prediction Center has said they believe La Nina will continue into spring. I am sure Drew Lerner will address this issue at the Allendale Leaders Conference on Jan 20 and 21 in Crystal Lake, IL at the Holiday Inn. You will have a chance to ask him any weather question you have on your mind. Export sales will be released at 7:30 this morning. Estimates for corn are 350 to 500 tmt, soybeans 400 to 600 tmt, and for wheat 300 to 500 tmt. Livestock traders will be waiting for the export data on pork. Is China really buying US pork? As we expected choice beef was 2.56 lower on Thursday and select was down .33. We are expecting to see more pressure on beef prices and packer margins over the next few weeks. Cash cattle are still in a standoff waiting for one side to show their hand. Pork product cutouts were down .38. The Allendale Leader Conference is 2 weeks away, make your reservation today.
 
Markets as of 5:30 AM
Corn: 1 to 3 higher               Beans: 3 to 5 higher            Wheat:3 to 5 higher
Live Cattle: 5 to 10 higher                            Lean Hogs: 10 to 20 higher
Dollar: .03 lower                    Crude: .37 higher                  Gold: 3.10 higher
 
Allendale Advanced Charts
Corn finally posted a correction after closing steady to higher 11 out of the last 12 days. We have support now at the 6.34 to 6.36 level. There should be some buying interest around that level. A second lower close and below the 6.34 level would negate recent uptrend.
 
Nelson Notesfrom the desk of Rich Nelson
The state of Parana, the #1 corn producer and #2 soybean producer, lowered its estimate of crop production overnight. Corn was reduced from 7.4 to 6.4 million tonnes. Soybean production was lowered from 14.12 to 12.73 million tonnes.
 
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.

 

Rally in Dec. 12 Futures Presents Pricing Advantage

Jan 05, 2012

 

Good Morning! Paul Georgy with early morning comments for January 5, 2012 at 5:00 am. Grain futures were lower overnight. Prices retreat on lack of fresh bullish news and potential weather relief in South America. Weekly export sale will be released tomorrow at 7:30. The Index fund rebalancing should take place between now and mid-January. The USDA report next week and the Chinese New Year Holiday are likely market movers ahead of us. Will China lower rate ahead of holiday to stimulate their economy especially in the auto and appliance industries? The stronger PMI numbers being released from countries around the world have traders looking for higher jobless numbers in the US on Friday. The EU credit stress has not gone away. Weather in Argentina is critical to near term prices in corn and beans. Drew Lerner from World Weather Inc. says "The bottom line, Argentina intensifies crop stress through the weekend with production potentials in decline. Rain that falls Jan. 9-11 will be sufficient to ease crop stress, but it will come too late to reverse some of the production losses in early corn, sunseed and a few other crops. Improvements will occur in many areas, however." You can ask Drew any question about weather on Jan 20 at the Allendale Leaders Conference. Sign-Up Today! Beef cutout values were slightly lower on Wednesday. We are expecting values to come under pressure late this week as packers move into a full slaughter week. Cash cattle have been quite with offers steady higher and no solid bids. Pork values are lower and traders are looking for export demand to provide support through a week or two of larger slaughter. We are using this rally in Dec 2011/2012 corn as a pricing opportunity. Call your Allendale representative to discuss specific strategies for you. 800-262-7538.
 
Markets as of 5:00 AM
Corn: 3 to 5 lower                Beans: 9 to 11 lower             Wheat:5 to 7 lower
Live Cattle: 10 to 20 lower                           Lean Hogs: 25 to 40 lower
Dollar: .49 higher                  Crude: .70 lower                   Gold: 1.20 higher
 
Allendale Advanced Charts
The dollar rebounds and closes above the 20 day moving average. Will the 3 day rule keep the uptrend intact? Filling the gap left on Tuesday is giving the bulls hope new highs can be made.
 
Nelson Notesfrom the desk of Rich Nelson
Allendale’s favored meteorologist, Drew Lerner, shared with us his thoughts that the drought in Argentina is probably similar to 2010/10 but not yet at 2008/09 levels. This analysis is based solely on vegetative health maps. He notes dryness has been severe but this time around it is not coupled with extended heat. Allendale currently estimates the 2011/12 crop, harvested in spring 2012, at 24 million tonnes.
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.

 

The New Year Gives Opportunity to Cash In on Corn

Jan 04, 2012

 

Good Morning! Paul Georgy with early morning comments for January 4, 2012 at 5:20 am. Grain futures set back overnight after rally on Tuesday. The New Year started out with a buying frenzy due to macro events and lack of rain in Argentina. The risk-on attitude by investors and funds was supported by good economic data from China, Europe and the US. Brazil seems to have adequate rainfall through the majority of the growing area. Argentina is dry and temps are in the upper 90’s to low 100’s. Crop deterioration is definitely happening. The last USDA yield estimate was 121.6 for the region. Last year they produced 99.6 bushels per acre.  We believe there will be a decline from the 29 MMT the USDA had forecast last month. The USDA January supply and demand report which will be released next Thursday morning is sure to create more volatility in the grain markets. In the last 5 years, the average move from the close the day before to the close the day after this report was greater than 20 cents for corn. Farmers are using this rally as a reason to make cash sales in a new tax year. Choice beef was down .65 and select was up .75 on Tuesday. Beef prices have improved as the short kill weeks have tighten supplies. We expect some pressure on beef as we get to the end of this week. Normal hours should produce greater inventory. Pork cutout improved slightly on Tuesday. Strength in commodity prices will need support from outside markets as we start 2012. Get the fact you need to make solid decision in 2012 by attending the Allendale Leaders Conference on Jan 20 an 21st in Crystal Lake IL. Go to www.allendale-inc.com
 
Markets as of 5:20 AM
Corn: 1 to 2 lower                Beans: 1 to 3 lower                Wheat:3 to 5 lower
Live Cattle: 10 to 20 lower                           Lean Hogs: 20 to 30 higher
Dollar: .23 higher                  Crude: .50 lower                   Gold: 2.30 higher
 
Allendale Advanced Charts
Beans gapped higher on Tuesday and now have 3 gaps on the chart. The first gap in mid-December does not meet the criteria of a breakaway gap. It could be however, since we are not working in an exact science. If beans extend the rally in the next few days with out filling recent gap the stage is set for a move to 12.90 area.
 
Nelson Notesfrom the desk of Rich Nelson
A survey at the annual Beltwide Cotton conference found producers intend to plant 12 to 13.5 million acres. That would be down sharply from last year’s 14.72 million acre level. It is almost equal to 2010’s 10.97 level. Well known cotton analyst, Carl Anderson formerly of Texas A&M, told Reuters newswire 85 cent cotton cannot compete with corn and soybeans.
 
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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