Apr 24, 2014
Home| Tools| Blogs| Discussions| Sign UpLogin


February 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.
 

European Central Bank Dumps More Cheap Money into System

Feb 29, 2012

 

Good Morning! Paul Georgy with early morning comments for February 29, 2012 at 5:15 am. Grain markets are slightly higher this morning. The strong cash markets, smaller South American production and the talk of inflation have grain markets setting new highs. Gulf basis was higher yesterday as producers are not willing to let go of old crop soybeans. The continuous lowering of estimates of Brazilian and Argentine soybean production has finally convinced traders that maybe they should be concerned. Money flows coming in on the buy side as traders try to get ahead of the second part of the Long Term Refinancing Operation by the European Central Bank (ECB) has impact on commodities. The ECB dumped 530 million Euros into the system this morning which was in line with trade expectations. Traders will be watching Fed Chairman Ben Bernanke’s Humphrey Hawkins testimony today. It is expected he will make sure the market is aware further monetary adjustments will be made if necessary. The injection of monies by EU or US is fueling the inflation card again. On Thursday the International Swaps and Derivative Association will rule if Greece defaulted due to the ECB’s special bond swap with Greece. Wholesale beef values closed at record highs again on Tuesday. Choice was up .09 and select was up .69. There were a few cattle traded in the south at 128.00 which would be steady with last Friday. The weaker dollar is supporting the idea of improving exports of pork and beef. You can help by participating in the Annual Allendale Planted Acreage Survey just click here.
 
Markets as of 5:15 AM
Corn    +1 to +2                      Live Cattle     +35 to +90                  US Dollar Index         -.01
Beans +1 to +3                      Lean Hogs      -05 to +20                   Crude Oil                    +32
Wheat +3 to +5                     S&P Index      +1.25                           Gold                            -3.38
 
Allendale Advanced Charts
May beans have closed for the second time above the 50% retracement level which puts next resistance at 13.34 area. The 12.92 area should provide initial support.

 
Nelson Notes from the desk of Rich Nelson
US: Over the past few weeks July soybeans have advanced faster than November. Private analysts have suggested big old crop soybean stocks would get even bigger for the new crop. USDA’s AgForum conference suggested the opposite, that big old crop stocks would actual decline a good deal. Will the market reconsider this spread?
 
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.

 

Soybeans Lead Markets Higher

Feb 28, 2012

Good Morning! Paul Georgy with early morning comments for February 28, 2012 at 5:15 am. Grain markets are higher lead by the soy complex. The soybean market continues to be the favorite commodity to be long. This prompted by the spin on news out of South America. Lowering of the Brazilian soybean crop by another organization in Brazil to 68 mmt has traders convinced US exports will outpace USDA projections. Combine the delay of up to 23 days in shipments out of SA, world buyers are coming to US. Corn and wheat found buying interest due to strength in beans. Macro markets are concerned about the EU ability to fund all of the debt after the G20 advised more cuts are needed there. Spreads between corn and soybeans values have narrowed enough to have producers talking about planting beans again. Go to www.allendale-inc.com and participate in the Planting Survey, we appreciate your help. Cash cattle traded at steady prices late last week. The slowdown in packer’s production is supporting cutout values. Choice beef sets another new all-time high at 198.56 up 1.14, select added another .59. Futures will be the key to cash markets this week. Pork cutout values were down .13 on Monday. There is still space at the meeting in Riverside IA on March 6, reserve your seat by clicking here.
 
Markets as of 5:15 AM
Corn    +1 to +2                      Live Cattle     +05 to +20                  US Dollar Index         -.17
Beans +4 to +5                      Lean Hogs      -10 to -30                    Crude Oil                    -.21
Wheat +3 to +5                     S&P Index      +4.75                           Gold                            +2.20
 
Allendale Advanced Charts
Crude oil finally had a setback after a $14.00 run. It still remains overbought with an RSI value near 80. First level of support crosses near 104.00.

 
Nelson Notes from the desk of Rich Nelson
Brazil: Analysis firm, Agroconsult, lowered its view of Brazilian soybean production from 71.0 to 69.9 million tonnes. USDA’s latest forecast was 72.0.
Brazil: Analysis firm, Agrural, lowered its view of Brazilian soybean production from 70.2 to 68.0 million tonnes. USDA’s latest forecast was 72.0.

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-Off Attitude Dominates Overnight Trade

Feb 27, 2012

 

Good Morning! Paul Georgy with early morning comments for Feb. 27, 2012, at 5:10 a.m. Grain futures are lower as outside markets retrace some of recent rallies. Thank you to the Melvin family for their hospitality. We had a great group of producers attend the meeting in Carrington, N.D. We asked those in attendance to fill out a survey on what they expect to plant this year compared to last year. The results may surprise you. They plan on switching approximately one-third of the spring wheat acres to corn in 2012. The bottom line is that 100 bu./acre corn will return more than an average-to-good crop of wheat. There was very little snow cover in North Dakota, which should limit any spring flooding. The Allendale Annual Planting Survey begins this week. We need your help, please go to the website and fill out the survey. The March options expired on Friday with 3,478 640 calls abandoned and 130 640 puts exercised. Brazil weather forecast is for more rain over the next five days. These rains should help double-crop soybeans and winter corn. The Syrian and Iranian situation will continue to dominate traders’ bias in the crude oil markets. The euro financial crisis has been silenced with the funding of Greece. However, we expect more problems to develop as the Greek election nears and Portugal debt payments become due. At the G20 meeting over the weekend, officials agree more money will be needed as the PIIGS crisis is far from over. The livestock market received a neutral to bullish Cattle on Feed report on Friday. On feed 102, placed 98 and markets 102; with these numbers we would expect a steady to higher opening. Cutout values for beef and pork were up slightly on Friday afternoon. There is still space at the meeting in Riverside, Iowa, on March 6, reserve your seat by clicking here.
 
Markets as of 5:10 AM
Corn    -3 to -5                        Live Cattle     steady higher              US Dollar Index         +.21
Beans -1 to -2                        Lean Hogs      steady lower               Crude Oil                    -1.30
Wheat -4 to -5                       S&P Index      -7.00                            Gold                            -10.3
 
Allendale Advanced Charts
May corn continues to trade in the wedge formation. The rule of thumb is the further it moves into the formation the chance of a significant breakout. That could be the case here as the market is content to trade sideways near moving averages.
 
Nelson Notes from the desk of Rich Nelson
The monthly Cattle on Feed report was slightly supportive. USDA’s survey of feedlots indicated Marketing’s (finished cattle leaving feedlots) were 2.4% larger than last year in January. That was better than the 0.3% estimate. Placements of new calves and feeders into feedlots were 2.2% smaller than last year. This was just under the 1.2% decline that was expected. 
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.

 

USDA Projections, Exports and Money Flow

Feb 24, 2012

 

Good Morning! Steve Georgy with early morning comments for February 24, 2012 at 5:10 am. Grains are pushing lower this morning as traders continue to dissect the numbers USDA released at their outlook conference. USDA’s chief economist said yesterday in a meeting that US farmers will plant the largest corn crop since 1944. He also said most field crops could be facing growing supplies that will drive down price. This news could keep some pressure in the corn and limit rallies for new crop. Beans have been strong this week due to weather concerns once again in South America. This continues to be friendly because traders believe that export sales will remain strong for US beans. Argentina’s Rosario Grain Exchange lowered production estimates yesterday for Argentina down to 44.5 million tonnes. That is down from 49.5 last month. As long as these worries continue we could see beans find support for now. USDA raised wheat planted acres and we are continuing to see pressure this morning from that news. Export sales will be out at 7:30 and traders are expected to see wheat sales between 500,000 and 900,000 tonnes. Corn estimates are between 800,000 and 1.2 million tonnes and traders are looking at beans to range from 3.5 million to 3.9 million. The dollar is falling again today as crude oil continues to push higher. Brent crude made new all-time highs in Europe due to the building tensions between Iran and the West. This is pushing our WTI crude in the US higher as well. Crude oil is trading near $109 a barrel this morning. With Europe having money problems, higher energy costs are not helping the situation. Box beef was down .02 in Choice and up .39 in select. We have been hearing talk of trade out of Western Nebraska at $128. That would be even with last week and could find more pressure in cattle due to the negative cold storage numbers that were released on Wednesday. Cash hogs were up 2.15 to 88.57 and pork cutouts remained steady but the concern for more pork in storage has been dragging hogs lower the last few days. Paul Georgy will be in Carrington ND at the NDSU Research Center today at 2:30. Please give us a call to reserve your seat at no charge. There will also be an Allendale 2012 Road Series meeting in Riverside IA on March 6th. Sign up today!
 
Markets as of 5:30 AM
Corn    -2 ½ to 3 ½                  Live Cattle     +40 to +50                  US Dollar Index         -.36
Beans -1 to -2                        Lean Hogs      +30 to +40                  Crude Oil                    +.62
Wheat -3 to -4                       S&P Index      +4.25                           Gold                            -3.60
 
Allendale Advanced Charts
Beans continue to push toward the 50% retracement level and 200 day moving average near 12.90. We have a sell order at 12.85 in case the market stalls out in that area. The bulls will need a lot of momentum to push through this key resistance level.
 
Nelson Notes from the desk of Rich Nelson
USDA’s 2012 crop price projections show a decline in corn from $6.20 to $5.00. Soybeans are seen declining from $11.70 to $11.50. Wheat prices are seen declining from $7.30 to $6.30. These "season average price" projections are cash + subsidies.
 
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.

 

Narrow Trading Range In Grains

Feb 23, 2012

Good Morning! Paul Georgy with early morning comments for February 23, 2012 at 5:10 am. Grain futures are mixed as buying beans and selling corn dominates market action. The fundamental news is old stories with a new twist. South American weather seems to be the most supportive to beans as some analyst lower production almost daily. With recent rains it seems likely that beans and late planted corn should be improving. The Outlook Board Forum will begin today with grains and livestock discussions on Friday. The USDA will release the presentation at 8:00 am (CST) tomorrow morning.  Spreading will likely be a major factor into the Friday morning numbers. We have option expiration on Friday and if you have been following March corn, it has traded at 6.40 fifteen out of the last nineteen sessions. The Greek financial situation is not settling very easy with traders and investors. Many are not convinced Greece can abide by the terms agreed upon. Portugal will be next in line for money from the EU. Wednesday’s monthly Cold Storage report held bad news for the meat industry. It confirmed that consumers backed away from meats in January. Stocks of pork in warehouses at the end of January were 100 million lbs. higher than the end of December. Though there is normally a rise during January, the five year average increase is only 59 million lbs. If consumers had a problem eating pork then perhaps they moved to chicken? Beef in warehouses grew by 25 million lbs. in the month of January. It had been six years since we saw an increase of that amount. In fact, the average January movement is for a 12 million lb. decline. Choice beef was 2.73 higher and select was up 1.48 on Wednesday. Pork cutout values were down 1.14. Lean hog futures broke the 90.75 level yesterday but were unable to close above it. We will be driving to Carrington ND later today, hope to see many of you at the meeting. Sign up today and reserve your free seat for our Allendale 2012 Road Series meeting in Carrington, ND and Riverside IA.
 
Markets as of 5:10 AM
Corn    -1 to -3                        Live Cattle     -10 to -30                    US Dollar Index         -.26
Beans +3 to +4                      Lean Hogs      -20 to -40                    Crude Oil                    +.08
Wheat -2 to -3                       S&P Index      +1.00                           Gold                            +6.10
 
Allendale Advanced Charts
Crude oil continues to climb at a steep trend. The break out gap left on Tuesday will be very important to the direction of the market. A close below that level could open the door for a quick sell-off.
 
Nelson Notes from the desk of Rich Nelson
Last week Ukraine newspapers indicated the government had encouraged grain companies to voluntarily limit grain exports. Overnight the Agriculture Minister indicated no such government action was taken. The official indicated exporters have told the government they can only export 300,000 to 500,000 tonnes per month due to tight supplies. He indicated total production would range from 42 to 50 million tonnes in 2012. That is down from 56.7 last year. Wheat harvest was seen at 15 to 16 mt compared with last year’s 22.3.
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 Turn Red Overnight

Feb 22, 2012

Good Morning! Paul Georgy with early morning comments for February 22, 2012 at 5:15 am. Grain markets are quiet but lower following yesterday’s large trading ranges. With the USDA Outlook Forum only a few days away, spreading has been a market mover. It seems that traders are expecting a large corn number and a smaller soybean stocks number out of USDA meetings. We are hearing a lot of talk about a seasonal trade of being long beans and short corn. Greece will receive the 130 billion euros and avert a crisis. Many are concerned that the new elections in April could reverse some of the mandated cuts made to get the money. This problem will likely stick its head up again. The Iran situation is now taking center stage pushing crude oil prices higher. Tensions continue to mount between Israel and Iran. Weather in South America should be beneficial to the later season crops. Dryness in the Midwest will get more attention in upcoming weeks as many areas are a bit dry. The weekly export sales will be announced on Friday at 7:30. USDA will provide their outlook presentation to the press at 8:00 CST on Friday morning. The reduced production by packers finally is tightening beef supplies enough to strengthen cutout values. Choice was up2.34 and Select was up 2.77. Pork cutout values were down .39. Sign up today and reserve your free seat for our Allendale 2012 Road Series meeting in Carrington, ND and Riverside IA.
 
Markets as of 5:15 AM
Corn    -2 to -3                        Live Cattle     +00 to -05                   US Dollar Index         +.18
Beans -5 to -6                        Lean Hogs      +02 to +07                  Crude Oil                    -.43
Wheat -3 to -4                        S&P Index      -2.25                            Gold                            -3.40
 
Allendale Advanced Charts
Corn tested the downtrend on Tuesday and closed near session lows. The consolidation we have seen for the last month would suggest a potential sharp move in the direction of breakout when it occurs.
 
Nelson Notes from the desk of Rich Nelson
The National Oilseed Processors Association reports January soybean crush at 142.813 million bushels. This was a little less than expectations of 144.5 million and may be considered a little disappointing. Though the year to date (Sep – Jan) marketing year total is down 4.9% versus last year we will point out January levels were only 1% smaller. Crush needs to run equal with last year from February to August to meet USDA expectations.
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.

Looking Ahead to USDA Forecast

Feb 21, 2012

 

Good Morning! Paul Georgy with early morning comments for February 21, 2012 at 5:00 am. Grain markets are mixed as spreading dominates trade. I had the opportunity to attend RJ O’Brien’s "Exchange of Ideas" on a cruise ship this past weekend. We heard several commodity industry leading analysts prognosticate the markets. They analyzed the fundamental aspects of the commodity markets but in summarizing they felt the agricultural markets will be greatly influenced by government involvement and government policy. Money flow of large speculative players will also have to be monitored closely. Stay close to Allendale’s Research. We will be conducting our annual planted acreage survey on March 1 through March 9. South America received good rains this weekend which should be beneficial to the late crops in Argentina and Brazil. The Greek debt situation inches closer to a solution which could prevent a default. The Iranian tension continues to mount and is causing traders to buy Brent crude. The USDA Outlook Forum will be held Thursday and Friday of this week. Expect to see new crop corn find selling interest on any rallies. Watch news headlines for a leak of USDA estimates before official presentation. Feedlots won the stand-off last week with packers. On Friday, packers came out bidding and had to pay several dollars higher. The strength in futures helped support this run, however we are expecting some profit taking early this week. The beef cutout value closed out the last week with higher prices. Choice was up 1.36 and select jumped 2.48. Pork cutouts were down .41 to 86.48. The April contract of hogs has resistance at 90.75 level. Sign up today and reserve your free seat for our Allendale 2012 Road Series meeting in Carrington, ND and Riverside IA.
 
Markets as of 5:00 AM
Corn    -3 to -5                        Live Cattle     steady                         US Dollar Index         -.25
Beans +3 to +5                      Lean Hogs      steady                         Crude Oil                    +1.35
Wheat -3 to -5                        S&P Index      +2.00                           Gold                            +13.40
 
Allendale Advanced Charts
Spring wheat traded above the 50 day moving average on Friday, but was unable to close there. This may be a selling opportunity as the trend is still down. However a close above the 50 day would suggest a retest of the downtrend line in red.
 
Nelson Notes from the desk of Rich Nelson
The National Oilseed Processors Association reports January soybean crush at 142.813 million bushels. This was a little less than expectations of 144.5 million and may be considered a little disappointing. Though the year to date (Sep – Jan) marketing year total is down 4.9% versus last year we will point out January levels were only 1% smaller. Crush needs to run equal with last year from February to August to meet USDA expectations.
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.

 

China Signs Deal To Purchase Soybeans

Feb 16, 2012

Good Morning! Paul Georgy with early morning comments for February 16, 2012 at 5:00 am. Grain markets are lower on spread unwinding and profit taking. Overnight markets have a risk off attitude. The EU and Greece battle continues with a lot of talk and political positioning. The EU ministers are scheduled to meet on Monday with the hope of a decision on the release of the $132 billion to Greece. The Chinese Delegation made an announcement in Des Moines, IA on Wednesday afternoon that they will buy around 8.62 mmt of soybeans in 2012/2013. They are expected to sign another memorandum of understanding today in Los Angeles which will bring total commitment to purchase more than 12 mmt of soybeans. This is a record purchase but in line with trade estimates. Weekly export sales will be released this morning at 7:30 am. The estimated ranges are: corn 600 to 950 tmt, soybeans 500 to 900 tmt, wheat 500 to 750 tmt. The markets will be closed Sunday night and Monday and will reopen Monday night at 6:00 pm. The USDA Outlook Forum is on Feb 23 and 24 where we will get their estimates on planted acres for 2012. Cattle trade is at a standoff although we heard a pen of cattle traded in the south for 123. Offers are 127 to 128 with very little interest from packer. Their cutout was help a bit today as choice beef was up 1.43 and select up 1.68. Futures reversed on Wednesday after making new highs however buying has come back to the market overnight. Pork cutout values were up sharply on Wednesday adding 2.41 of value. Futures will likely be supported because the strength in product. Sign up today and reserve your free seat for our Allendale 2012 Road Series meeting in Carrington, ND and Riverside IA.
 
Markets as of 5:00AM
Corn    -2 to -3                        Live Cattle     +30 to +50                  US Dollar Index         +.34
Beans -7 to -8                                   Lean Hogs      +60 to +90                  Crude Oil                    -.51
Wheat -1 to -3                        S&P Index      -4.50                            Gold                            -7.80
 
Allendale Advanced Charts
Corn finished below the 100 day moving average with next line of support at 6.24 the 50 day averge. The up trend support line crosses at 6.10 on Thursday.
 
Nelson Notes from the desk of Rich Nelson
The National Oilseed Processors Association reports January soybean crush at 142.813 million bushels. This was a little less than expectations of 144.5 million and may be considered a little disappointing. Though the year to date (Sep – Jan) marketing year total is down 4.9% versus last year we will point out January levels were only 1% smaller. Crush needs to run equal with last year from February to August to meet USDA expectations.
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.

EU Meeting Downgraded Dollar Slides

Feb 15, 2012

Good Morning! Paul Georgy with early morning comments for February 15, 2012 at 5:00 am. Grain futures are higher in a quiet overnight session. The battle between Berlin and Athens continues. The EU Finance Ministers have downgraded the meeting set for today to a teleconference and set the next meeting for Monday. The ministers (or at least a few of them) concerns are that the concessions made by the Greek government may not be put into practice once the $132 billion euros is given to them. The ministers are waiting for a letter of commitment from Greece. The reluctance of EU to payout the money is supportive to the Euro and in turn negative to the dollar. Traders are waiting for the Chinese delegation to visit IA today in hopes that an announcement of a commitment to purchase US grain will be made. Export sales of beans have been announced by USDA earlier this week. Expect more choppy markets into Friday’s close as markets will be closed on Monday in observance of Presidents Day. The USDA Outlook Forum next Thursday and Friday will be the next big event once the Chinese Delegation leaves the US. Cattle futures closed near contract highs on Tuesday which has supported the feedlots position to ask for more money this week, Texas is asking 126 to 127. The choice beef value increase of .73 and select up .62 will not help packer margins if they have to pay 2.00 higher for fed cattle this week. Tight supplies of market ready cattle and resistance at the retail counter by consumers is causing the squeeze on packers. Hog futures held support and bounced on technical buying. Watch for key resistance at 90.62 in April contract. Allendale 2012 Road Series will meet in Carrington ND on February 24, 2012 and in Riverside IA on March 6.
 
Markets as of 5:00AM
Corn    +1 to +2                      Live Cattle     +10 to +20                  US Dollar Index         -.30
Beans +3 to +5                      Lean Hogs      +05 to +15                  Crude Oil                    +.78
Wheat +2 to +4                      S&P Index      +7.50                           Gold                            +9.40
 
Allendale Advanced Charts
Beans confirmed Monday’s breakout by holding above 38% and closing higher yesterday. We have to respect the uptrend for now. Next upside target has to be seen as 12.90 in March beans.
 
Nelson Notes from the desk of Rich Nelson
The National Oilseed Processors Association reports January soybean crush at 142.813 million bushels. This was a little less than expectations of 144.5 million and may be considered a little disappointing. Though the year to date (Sep – Jan) marketing year total is down 4.9% versus last year we will point out January levels were only 1% smaller. Crush needs to run equal with last year from February to August to meet USDA expectations.
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.

China Delegation Comes to Iowa

Feb 14, 2012

 

Good Morning! Paul Georgy with early morning comments for February 14, 2012 at 5:20 am. Grains mixed on profit taking and China’s visit to the US. The events in Greece and the bombing of Israeli embassies yesterday have heightened the potential volatility for commodities. Crude oil is very sensitive to Iran’s retaliation as shipping companies are not willing to load oil out of Iranian ports. The EU finance ministers will meet on Wednesday to decide on releasing the monies to Greece. There are comments out of EU that suggest this will not be a slam dunk approval. NOPA will release their January crush report this morning and is expected to come in at 144.5 million bu. with soyoil stocks expected at 1.977 billion lbs. The Vice President of China will be traveling with his delegation on Wednesday to Iowa at which time he is expect to announce and ink a new export deal for soybeans. Rich Nelson did a nice job of explaining the likelihood of this agreement at Allendale’s Monday Research meeting. We can email those comments to you just click here and request Nelson’s Comments. Ukraine Ag Minister reported the winter wheat crop is 67% good and 33% poor. That is a far cry from the meteorologist last week saying 40 to 60% of Ukraine’s wheat was dead from winter kill. Drew Lerner, World Weather Inc. comments on weather in the latest GFS Model has changed the timing of rainfall in the first week but second week of forecast is advertising greater amounts of rain for Argentina and Southern Brazil. Meat product continues to be the problem that haunts packers and feedlots. The packers are unable to get retail prices up to a level which can support stronger fed cattle prices during this tight fed supply period. Choice product was up .57 and select was up .09. Futures continue to follow the direction of stock indexes. Traders assume higher stock prices suggest things are getting better and that means retail can support higher levels. Pork cutout values were lower on Monday. Futures slipped below chart support on the close Monday as well. Can turn around Tuesday get the hog market back in an uptrend? Allendale 2012 Road Series will meet in Carrington ND on February 24, 2012 and in Riverside IA on March 6.
 
Markets as of 5:20AM
Corn    -1 to -2                        Live Cattle     +10 to +20                  US Dollar Index         +.10
Beans +3 to +5                      Lean Hogs      +10 to +20                  Crude Oil                    +.54
Wheat -2 to -4                        S&P Index      +1.00                           Gold                            -6.20
 
Allendale Advanced Charts
Hogs settled below the 50 day moving average, a bearish technical signal. There is not much to support this market immediately below until the 86.50 area.
 
Nelson Notes from the desk of Rich Nelson
Our favored forecaster, Drew Lerner of World Weather Inc., tells us of concern about this weekend’s temperatures in the far Northern Plains. Temps hit down from -10 to -25 degrees in parts of South Dakota, North Dakota, and Montana with no insulating snow cover.
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.

 

Greece Passes Austerity Plan; Grains Higher

Feb 13, 2012

Good Morning! Paul Georgy with early morning comments for February 13, 2012 at 5:10 am. Grain futures are starting the week higher as risk-on attitude provides the money flow. The Greek Parliament passes plan for cuts in their budget which will allow them to get the money from the EU. The next step will be the EU Finance Ministers meeting on Wednesday. Soybean markets have shown some strength due to less rain in southern Brazil than expected. The nearby contracts have seen some support on rumors China was buying. There will be a Chinese delegation in the US this week to sign trade agreements. The Chinese Premier usually makes an announcement of large bean purchases at that time. Just remember in the past they were not all new purchases. Trade will likely be well supported until this announcement. Egypt was a buyer of wheat over the weekend of 595,000 tonnes. The US got on 55 tmt while France sold 300 tmt and Argentina sold 240 tmt. Keep an eye on the macro markets this week and keep in touch with Allendale Research or your Allendale broker for an announcement from China. Cash cattle traded 1.00 higher in Texas at 124.00 while dressed trade in NE was steady to .50 lower is some area at 197.00 to 198.00. Choice beef traded .33 higher while select was .44 lower. Not a lot of help in narrowing the negative margins for packers. Pork cutout values were higher on Friday. February hog contracts go off the board this week. April futures closed on horizontal support on the charts. We are expecting livestock futures to take their direction from outside markets at 9:05. We invite you to join us on the Allendale 2012 Road Series. Meet us in Carrington ND on February 24, 2012 for more info and free signup click HERE. We have also just scheduled a meeting in Riverside IA on March 6 details click HERE.
 
Markets as of 5:10AM
Corn    +5 to +6                      Live Cattle     called stdy to higher               US Dollar Index         -.40
Beans +10 to +12                  Lean Hogs      Called stdy to higher              Crude Oil                    +.97
Wheat +8 to +9                      S&P Index      +8.50                                       Gold                            +3.50
 
Allendale Advanced Charts
Chicago wheat went through the 100 day and 20 day moving average but held the 50 at 6.27. We are looking for a downside target near 6.00 where we find major trendline support.
 
Nelson Notes from the desk of Rich Nelson
The General Administration of Customs indicated China imported 4.61 million tonnes of soybeans in January. That was down from December’s strong 5.42 mt level. Traders note this year’s Lunar New Year, a week-long holiday, occurred in January this year instead of the normal February. The Chinese government estimates February and March imports at 3.7 and 4.0 mt respectively.
 
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.

Greek Debt Deal Deadline Cools Commodities

Feb 10, 2012

Good Morning! Paul Georgy with early morning comments for February 10, 2012 at 5:20 am. Follow through selling has grain futures lower this morning. The Greece debt deal was not approved by EU finance ministers but the deadline for further changes was moved to Feb15th meeting. Commodity futures selloff as investor euphoria wanes. Corn and soybean markets post a new high for the move and close near lows on Thursday. This occurred after a neutral to a touch friendly USDA report. What should that tell us? We believe that the buyers were hoping for better news from USDA and it seems now that the crop losses in South America have been priced into the US futures. We are watching three factors for the next few weeks. The Macro situation with the Eurozone and Greece debt will be ongoing and have day to day influences on our markets. The cash market will be monitored closely in corn and soybeans and will likely provide support to nearby futures. Producers will be strong holders and not sell on weakness in futures unless basis improves. The third factor is the potential planted acres of corn and soybeans. The USDA will give us a glimpse of their thoughts on Feb 23 and 24th when they hold the USDA Outlook Conference in Washington. This will not be an official number but an estimate by their economist. Allendale will be doing our annual Planted Acreage Survey on March 1 through March 9. We will release the survey results the following week, well before the USDA gives us the Prospective Plantings numbers on March 31. The weather in Ukraine and south Brazil will be monitored but likely not a market mover for now. Subscribe today to the Allendale Research Center for a special low price of $250 for 13 months or call 800-262-7538 and get the full details. The cattle trade is confusing and difficult to justify by fundamental news. Packer margins are in the red, feedlot closeouts are showing losses and retail margins are ugly. Even with a slowdown in production by packers they struggle moving beef at current levels. Choice beef was down .24 and select was up .84 on Thursday. Pork should be gaining demand for high priced beef but pork cutouts were down .23. We invite you to join us on the Allendale 2012 Road Series. Meet us in Carrington ND on February 24, 2012 for more info and free signup click HERE. We have also just scheduled a meeting in Riverside IA on March 6 details click HERE.
 
Markets as of 5:20AM
Corn   -3 to -4                        Live Cattle     -20 to -30                    US Dollar Index        +.15
Beans -7 to -9                                    Lean Hogs      -10 to -15                    Crude Oil                   -1.08
Wheat -8 to -9                        S&P Index     -7.50                            Gold                            -16.00
 
Allendale Advanced Charts
Beans were able to take out some key resistance at 12.46 ¼ on Thursday, but like corn it couldn’t hold on to the strength. Reistance still remains at 12.47 area and support crosses at the 100 day moving average at 12.05 level.
 
Nelson Notes from the desk of Rich Nelson
US ending stocks fell from 846 to 801 million bushels which was near expectations of 791.
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.

Trade Prepares for USDA Report

Feb 09, 2012

 

Good Morning! Paul Georgy with early morning comments for February 9, 2012 at 5:00 am. Grain prices are slightly lower ahead of the USDA report due to be released at 7:30 am. The macro market is waiting for official announcement that the Greek government and the private investors have come to an agreement. The EU Finance Ministers are meeting today to decide if they are ready to accept the agreement and provide the money necessary to keep Greece from defaulting. The market moving news will be released at 7:30 this morning when USDA gives us supply and demand figures for February. The trade average estimate for corn ending stock is 797 million bushel compared to last month of 846 million bushel. Allendale is estimating 803 million bushel ending stocks for corn. Trade estimate for soybeans is 269 million bushel verses 275 and wheat the trade is looking for 868 versus 870 million bushel. The other two numbers of interests are the Argentina corn production; trade is thinking it should be 22.5 mmt versus USDA last month of 26.0 mmt. The USDA had Brazilian soybean production last month at 74.0 mmt and trade is thinking it should be 71.7 mmt. Remember you have until 7:15 to adjust your grain positions before report. Cash cattle trade is at a standstill however it seems the packers will have to pay up to get cattle this week. The strength in futures and improving cutout values combined with tight market ready supplies should give feedlots the stronger hand. Choice beef was up .88 and select was up 1.37 on Tuesday. Pork cutout values were down by .13 yesterday afternoon. The report at 7:30 will have an impact on livestock prices and likely the spreads between nearby and deferred futures contracts. Listen to the "Morning Coffee" YouTube presentation and we will update and give a reaction to the report by 8:00 am. Subscribe today to the Allendale Research Center for a special low price of $250 for one year Call 800-262-7538. Meet us in Carrington ND on February 24, 2012 for more info and free signup click HERE.
 
Markets as of 5:00AM
Corn   -2 to -3                        Live Cattle     -20 to -40                    US Dollar Index        -.12
Beans -1 to -2                        Lean Hogs      -10 to +20                   Crude Oil                   +.55
Wheat -1 to +2                       S&P Index     -2.25                            Gold                            +4.50
 
Allendale Advanced Charts
Cattle closed in the middle of the range today and near the middle of current sideways trading range. Support remains at 127.85 while resistance crosses at the contract high of 129.75.
 
Nelson Notes from the desk of Rich Nelson
The farming organization, UGP, estimates this spring’s soybean crop will total 4.6 million tonnes. That would be down sharply from last year’s 8.4 mt production. This is also sharply lower than USDA’s 7.6 mt.
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.

 

ECB Concessions Support Greek Deal

Feb 08, 2012

Good Morning! Paul Georgy with early morning comments for February 8, 2012 at 5:30 am. Grain markets are higher as risk-on money flow drives commodity prices. Greek debt negotiations near another deadline and the European Central Bank has agreed to relax its position. The hope of a Greek Debt deal is supportive to the Euro and improves chances for US exports. The USDA will tell us tomorrow morning how tight corn supplies will be at the end of marketing year. The focus is on reduced ending stocks in corn, beans and wheat. Traders are convinced the USDA has under estimated the ethanol usage. Year to date ethanol production (Sep 1 to present) is up 3.0% over last year. USDA suggests corn use for ethanol will fall from 5.021 billion to 5.000 (-0.4%).  Ethanol production declines seasonally into March. The recent rally in corn and the drop in ethanol values have put many ethanol plant operations in the red. Another area the trade will be looking at closely is the South American crop; a further reduction of their production could increase US exports. Be prepared for a sharp move after the report. The newswire survey of analyst predictions for the 2012 corn planted acreage suggests an increase of about 2.5 million acres of corn. The spreads between old crop and new crop corn is likely to widen if USDA lowers ending stocks. The lower dollar provided a buyers incentive in livestock markets on Tuesday. The packers will have a tough time getting any inventory with cattle futures within striking distance of contract highs. Cutout value for choice beef was up 1.02 and select was up 1.04. Pork cutouts were up.43 on Tuesday. An improvement in export demand is needed to boost product values and ultimately feedlot closeouts. Subscribe today to the Allendale Research Center for a special low price. Meet us in Carrington ND on February 24, 2012.
 
Markets as of 5:30AM
Corn   +3 to +5                      Live Cattle     +20 to +40                  US Dollar Index        -.02
Beans +6 to +7                      Lean Hogs      +10 to +30                  Crude Oil                   +1.03
Wheat +3 to +4                      S&P Index     -0.25                            Gold                            -1.00
 
Allendale Advanced Charts
Cattle market bounced sharply off of short-term uptrend support line on Tuesday. Do we have enough momentum to make a run to new contract highs above 129.75?
 
Nelson Notes from the desk of Rich Nelson
Analysis firm, UkrAgroConsult, forecasts 2012/12 wheat exports at 6.3 million tonnes. This comes from a shortfall in production from 22.3 mt last year to 13.7 for the upcoming new crop. This seems like an aggressive export total given the production loss.
 
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 Prices Ease Ahead of USDA Report

Feb 07, 2012

Good Morning! Paul Georgy with early morning comments for February 7, 2012 at 5:20 am. Grain markets are lower as traders begin to adjust positions for the next big event, Thursday’s USDA report. The fundamental news has not changed much and Greek debt concessions are likely to linger on until the next deadline is passed. Greece finds themselves in a general strike protesting any new government cuts. Will there be a surprise in the upcoming USDA report? Trade guesses for Thursday’s supply and demand report are expecting a reduction in all three grains ending stocks.  Corn stocks are expected to decline from 846 mil bu. to 791 mil bu. Soybean stocks are expected to decline from 275 mil bu. to 273 mil bu. Wheat stocks are expected to be lower as well with a decline from 870 mil bu. to 867 mil bu. Will the USDA lower the Argentina corn crop as much as the trade believes is lost? The trade feels it is not a question of if, but how much. Demand for ethanol use and exports will be watched for trends. We expect to see more position adjusting going into this report. The Goldman roll will be a factor on the close again today. Beef prices appear to be affected by the reduced production of packers. Choice cutout was up 1.54 and select was up .99 on Monday. The heavy snow missed most of the cattle feeding area and packers will wait until late in the week to make purchases. Pork cutouts are down .35. Product movement of beef, pork and poultry has been all slowed down and could struggle for a few weeks until consumers work through the post-holiday bills. It is important that futures hold recent lows. Checkout the Allendale Research Center, sign up for a free trial TODAY. Call us at 800-262-7538.
 
Markets as of 5:20AM
Corn   -2 to -3                        Live Cattle     -10 to -15                    US Dollar Index        +.04
Beans -3 to -4                                    Lean Hogs      -10 to -20                    Crude Oil                   -57
Wheat -4 to -5                        S&P Index     -1.25                            Gold                            -7.60
 
Allendale Advanced Charts
March soybeans tested 38% retracement levels today near 12.46 1/2, but instead of pushing through resistance it closed near session lows. The chart now has an identifiable support and resistance point. Breaking of either of these points could prove to be the start of a sizeable move in the direction of the breakout.
 
Nelson Notes from the desk of Rich Nelson
Analysis firm, Celeres, revised its corn crop estimate down from 61.98 million tonnes to 60.6 mmt. This estimate is right next to USDA’s current 61.0. Most other groups are estimating fewer than 60.
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 and U.S. Dollar Higher

Feb 06, 2012

 

Good Morning! Paul Georgy with early morning comments for February 6, 2012 at 5:20 am. Grain markets are higher as traders prepare for USDA report on Thursday. Higher grain markets around the world after the strong close on Friday is also providing support. The EU debt situation should be dominating headlines today. The Greek debt deal is still being worked on. The troika has met on Sunday and has extended their meeting into Monday with more demands on the Greek government. Greece needs $171 billion by end of March or they will have to default. This week, the USDA will update us with the monthly supply and demand report due to be released on Thursday, February 9th. Trade will be focused on the corn ending stocks after the strong basis we saw last month. Rains fell over 85% of Argentina this weekend with more rain in the forecast this week. Cash cattle trade was steady to a dollar lower in the south, while the dressed trade was 2.00 to 4.00 lower than last week. Friday choice beef cutout values were .07 lower and select was .45 lower. Pork carcass values were up .15. Without the support of a winter storm crossing through the cattle feeding belt this week we expect cattle to start out steady to lower. Get all the details by subscribing to the Allendale Research Center. Call an Allendale Rep today to answer any question about the markets at 800-262-7538. If you are in the Carrington, ND areas on February 24, 2012 stop-in and see us (details to follow).
 
Markets as of 5:20AM
Corn   +2 to +3                      Live Cattle     called steady lower                US Dollar Index        +47
Beans +6 to +9                      Lean Hogs      called steady lower                Crude Oil                   -1.04
Wheat +3 to +5                      S&P Index     -5.25                                        Gold                            -20.60
 
Allendale Advanced Charts
Soybeans found strength on Friday as they headed toward the 38% retracement level of 12.46 1/2 . The January high was made in this area. A close above this area opens the door for a move to near 13.00.
 
Nelson Notes from the desk of Rich Nelson
The Department of Labor’s monthly update for job grown, non-farm payrolls, showed an increase of 243,000 for the month of January. That was much more than economists’ consensus of 150,000. This will push the dollar a little higher and exert a negative influence on commodities today.
 
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.

 

Traders Prepare for Labor Data This Morning

Feb 03, 2012

 

Good Morning! Paul Georgy with early morning comments for February 3, 2012 at 5:15 am. Grain markets are higher this morning. The risk-on attitude by investors across the commodity complex is providing support. The trade will be closely watching the US employment numbers due to be released at 7:30. Europe’s financial problems have not gone away but have cooled off for a few days. They will be back! The USDA will be giving us the monthly supply and demand on Feb 13. On the 23rd of February, the USDA will release its estimate for 2012 production of corn and soybeans. With profitable return projections for corn over beans, the trade is expecting some increase in corn acres. Weather has taken a backseat as more rain is forecast for South America. The weather system moving across Colorado and Nebraska could cause some problems for livestock producers over the next few days. Cash cattle markets are still at a standstill with winter storm closing in. Choice beef was down 1.08 and select was down .15 on Thursday. That makes it difficult for packers to raise bids when margins are deep in the red. Tight supplies of market ready cattle are providing underlining support. We expect cattle to trade late today. Pork product struggles as well at the retail counter, cutout values were down .32 yesterday. Call an Allendale Rep today to answer any question about the markets at 800-262-7538. We just booked a meeting in Carrington, ND on February 24, 2012. We will have all the details for you early next week. Get all the details by subscribing to the Allendale Research Center.
 
Markets as of 5:15AM
Corn   +2 to +3                      Live Cattle     +05 to +15                  US Dollar Index        -15
Beans +6 to +8                      Lean Hogs      +05 to +17                  Crude Oil                   +58
Wheat +4 to +6                      S&P Index     +3.00                           Gold                            +3.50
 
Allendale Advanced Charts
Feeders traded in a small range with an inside bar. The uptrend remains intact with the 10 day moving average running near the uptrend support line. A sharp selloff could occur if this support is broken.
 
Nelson Notes from the desk of Rich Nelson
Thursday morning’s weekly export sales for soybeans, at 308,400 tonnes for old crop, 11 million bushels, will be considered disappointing.
 
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.

 

Profit-Taking Ahead of Jobless Data

Feb 02, 2012

 

Good Morning! Paul Georgy with early morning comments for February 2, 2012 at 5:10 am. Grain markets are lower on profit-taking after recent rallies. The macro situation in Europe continues to cool off as we wait for results from Greek debt swap negotiations. Weather in Argentina should provide plenty of rain which will be helpful to the Safrinha crops and late development of regular season corn and beans. There will be other areas which no amount of rain will help crops. Today will be a big day for reports. The USDA will give us the weekly export sales at 7:30; the estimates are: wheat 400-600 tmt, corn 700-950 tmt, beans 350-550 tmt, meal 75-150 tmt, bean oil 0-10 tmt. At 7:30, we get Jobless claims which could have a residual effect on grains. Friday morning, Stats Canada will release the year end stocks report. The Rodgers Fund should have wrapped up the roll of their March contracts. The export situation out of Russia is being watched closely as traders wait for an announcement of some kind of export tax. No cash cattle trade with very light demand. Cutout values were higher, choice up 1.4 and select up .60. Pork cutout was up .10. April futures contracts close strong on Wednesday with lean hogs breaking out of recent trading range. Look for further seasonal strength in hogs. If you have any questions don’t hesitate to call Allendale at 800-262-7538.
 
Markets as of 5:10AM
Corn   -5 to -6                        Live Cattle     -20 to -30                    US Dollar Index        +04
Beans -6 to -7                                    Lean Hogs      +10 to +25                  Crude Oil                   -66
Wheat -7 to -9                        S&P Index     +2.25                           Gold                            +.60
 
Allendale Advanced Charts
Crude Oil is testing the neckline of the Head and Shoulders top formation. The most recent low sits at 97.40 and if broken on the close suggests a move to 91.10.
Nelson Notes from the desk of Rich Nelson
The state weather forecaster indicated their winter crop production could fall by 42% to 58% due to this year’s drought. That would lower winter grain production by 10 to 14 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.

 

Tight Supplies and New Money Push Prices Higher

Feb 01, 2012

 

Good Morning! Paul Georgy with early morning comments for February 1, 2012 at 5:10 am. Grain futures are higher this morning. Positive economic data out of China as their PMI came out at 50.5 which was above the average estimate of 49.0. The Greek debt swap is dragging on and there has been a downgrade of several Portuguese banks by a rating agency. The first of the month is providing support as traders anticipate fresh money being invested. Argentina is expected to receive more rain across the entire region with .5 to 2 inch amounts. This system will then move into southern Brazil continuing to provide moisture. The US Hard Red Winter wheat conditions should get a boost as heavy snow is expected to move across the area this weekend. The large, short positions by funds and public in the wheat seem to be a catalyst for the recent rally. The talk of winter kill in Eastern Europe, Ukraine and into Russia is causing some concern to traders. It may be a little early to assess winter kill losses in wheat as it is in dormancy. Beef product values did not do much to help negative packer margins as choice was up .35 and select was down .60. We heard of some cattle trading in NE at 196 but not enough to establish a market. Packers are definitely slowing down production however the snow forecast for the cattle feeding area later this week may force some movement. Pork cutout was up 1.26 on Tuesday and hog futures are trying to find their seasonal lows. Subscribe today to the Allendale Research Center and get the full story.
 
Markets as of 5:10AM
Corn   +7 to +8                      Live Cattle     +15 to +30                  US Dollar Index        -24
Beans +7 to +8                      Lean Hogs      +20 to +40                  Crude Oil                   +72
Wheat +7 to +9                      S&P Index     +10.00                         Gold                            +8.30
 
Allendale Advanced Charts
Spring wheat continues to work into a large descending triangle formation. Key support crosses at 7.89 and if broken would suggest more downside potential. Check your Chicago wheat chart, it is set to test upside resistance which could lead the spring wheat higher through key moving average resisance.
Nelson Notes from the desk of Rich Nelson
Prime Minister, Lucas Papademos, told reporters an agreement with debt holders is now in place. An official announcement would be made on the deal at the end of the week. One potential issue that creditors apparently asked for, and may receive, was a demand for Greece to make an additional 2 million Euros in spending cuts this year.
 
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.

 

Log In or Sign Up to comment

COMMENTS

Receive the latest news, information and commentary customized for you. Sign up to receive Top Producer's eNewsletter today!

 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions