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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.

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
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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