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The Allendale Wake-Up Call

RSS By: Paul Georgy,

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.

Forecast Puts Rain On The Way

Jul 26, 2012

Good Morning! Paul Georgy with early morning comments for July 26, 2012 at 5:15 am. Grain futures are lower after another volatile overnight session. Weather still is a factor as GFS and Euro models are getting in sync. Drew Lerner of World Weather Inc. is sticking to his forecast that most of the Midwest will receive rains, relieving crop stress over the next 2 weeks. Temps will be cooler after this week. The grain markets seem to be shifting focus from weather to chart patterns and macro tensions. However, the daily decline in trade analysts yield estimates is providing support in corn and beans. Rich Nelson, Director of Research at Allendale, has done some demand analysis in drought years which suggests we will be looking at significant usage declines in 2012-13 to keep ending stocks manageable. Some of that study was discussed on Tuesday’s Ag Leaders Webinar which will be available Friday morning at . Senator Cardin, D-MD, introduced legislation this week that would reduce the ethanol mandate when corn stocks are tight. Crop tours are putting out information that confirms what farmers have been telling us, "The corn crop is devastated in some areas." The plots in Putnam County, IN were passed over as researchers said there was no corn there to count. The wheat tour was bringing back much better results for spring wheat. USDA Weekly export sales will be released at 7:30 am and estimates are: Corn 250 to 350 tmt, Soybeans 350 to 550 tmt, Soymeal 75 to 125 tmt, Bean Oil 10 to 20 tmt and Wheat 400 to 600 tmt. Cash cattle trade is at a standstill. Feedlots are hoping for higher prices as close-outs are showing losses of $275 to $300 per head. Boxed beef closed on Wednesday mixed. Choice was down .15 and select was up .11. Lean hog futures has had a several day run to the upside. However pork cutout was up only .16 on Wednesday.
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Markets as of 5:15 AM
Dec Corn    -4 1/4
Nov Beans   -27 1/2
Sep Wheat   -10
Aug Cattle -.27
Aug Hogs    +.40
Sep S&P     -1.00
Sep Dlr     +.03
Sep Crude   -.47
Aug Gold    -4.30
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Allendale Advanced Charts
Yesterday’s trade in Oct. Live Cattle has continued the lateral choppy type of price action we have seen over the last week. While we have seen a break of four consecutive inside range days we did close inside the previous day’s range. I still think that this market should be approached from the long side unless we see close below the 7/19 low at $122.10.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Confirming rumors circulating for some time, Smithfield Foods, the nation’s largest hog producer and largest pork processor, confirmed it had purchased an un-specified amount of Brazilian corn for import to the US. One South American analyst suggested there was a $55 per metric tonne discount and shipping was only $30 to $40.
Contact Allendale: 800-262-7538
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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