Priced were mixed for the week, sales to China could lead to higher moves
The markets have had a week now to chew on the data that came out in the Jan. 12 reports. Jerry Gulke, president of Gulke Group, says the good news is prices didn’t go any lower, and the bad news is we didn’t go any higher. “We had a sideways market, all in all.”
On Friday, March 2012 corn closed at $6.11, March 2012 soybeans at $11.87 and March 2012 wheat at $6.10. Visit AgWeb's Market Center.
Gulke says in order for a price to be classified as negative or positive, it should close above or below a certain price level twice. “This week, we closed below $6 in March corn. It felt like it was going to fall apart, but the last two days it has been above $6.”
The Factors at Play
South American weather, tight basis levels and the remnant report data were all playing into prices this week. Gulke says the other major driver is the rumor of China needing to buy corn.
He says the best news going into next week is that China decides to buy corn, which means $6 is an acceptable price for them.
“If we have an announcement over the weekend that we sell a million tons to China, we’re going to open the market a lot higher on Monday,” he says. “That gives us the opportunity to gap higher.”
If China buys does corn, Gulke believes that will hold the elevators doors tighter shut and make farmers think if China buys some, they’ll buy more. This situation could tighten basis up even more.
Listen to Gulke's full audio analysis.
For More Information
Visit AgWeb's Market Center.