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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.

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
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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