Watch Chart Patterns for Price Outlook
Oct 16, 2012
Good Morning! Paul Georgy with early morning comments for October 16, 2012 at 4:35 am. Grains are higher on short covering and the turnaround Tuesday psychology. With weak closes on Friday and Monday, traders are watching key chart points. Dec corn has support at 7.32, wheat at 8.38 and November soybeans closed below the 15.00 support area and now projects to 14.56. There has been continuing reports of better than expected soybean yields from our producers in the North and South. Weather is improving in Brazil and Argentina has more than adequate rain. The USDA showed producers worked long hours last week as corn harvest advance by 10% to 79% complete and soybean harvest went from 58% to 71% complete. Wheat planting was right on the average of 71% done. End-users are buying hand to mouth as price trend is down. However, basis is suggesting farmers have locked the bin doors waiting for higher prices. In our weekly broker meeting, we discussed the export situation for 2012. The USDA is looking for 25% reduction of corn export from 2011 to 2012. In 2011 corn exports were at a 14 year low. Currently year to date corn exports are 39% below a year ago. And if you look at the last four weeks (since prices have rallied) we are 89% below a year ago. Currently US gulf corn is 8.39 per bushel and Argentina corn is 7.08. The remaining question is: What will it take to buy US demand back? Livestock producers get a breath of air with lower corn prices but it is going to take a realignment of cattle and hog prices to make these operations profitable. Boxed beef values were sharply higher on Monday with choice up 2.29 and select up 1.85. Pork cutout values were up .83. Hog spreads have been a feature in the pork complex and we expect corn price to lead the spreads. Call your Allendale Rep to discuss strategies for trading interest. Allendale 25th Annual Conference is going held January 25 and 26, 2013. You can register today.
Markets as of 4:35 AM
Dec Corn +4 3/4
Nov Beans +3 1/4
Dec Wheat +4 3/4
Dec Cattle +.15
Dec Hogs -.07
Dec Dlr -.15
Dec S+P +.75
Nov Crude -.29
Dec Gold +1.40
Allendale Advanced Charts
Yesterday Nov Soybeans reconfirmed the downtrend with a new low of $14.85 ¾ this is the lowest that we have traded since early July. In order to negate the downtrend and raise the odd of a base and reversal we would need to see a close above the 10/09 $15.74…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Reuters newswire confirms Friday’s rumors of higher corn imports. The newswire suggests 600,000 tonnes of Argentine corn was purchased last week by Southeast livestock operations. This comes on top of the 750,000 tonnes purchased in the previous month. The first shipment is expected to arrive in Wilmington, North Carolina on November 12. Continued shipments will be spread out through next May. The trade suggests USDA’s 75 million bushel corn import forecast could rise to 118.
This material has been prepared by a sales or trading employee or agent of Allendale Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Allendale Inc.’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Allendale Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.