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Corn Prices Rally Back after Big Drop

July 9, 2011
By: Sara Schafer, Farm Journal Media Business and Crops Editor

USDA’s June 30 reports blasted the corn market last week, with its projection that U.S. farmers have planted 92.3 million corn acres this year, 5% more than last year. This week, recovery was the major theme in the corn market.

“Corn prices went up almost every day this week,” says Jerry Gulke, president of Gulke Group. “This is not unexpected after we dropped more than $1.20 on December corn. You would think there would be some rally.”
 
On Friday, December corn closed at $6.37, up 21 cents.
 
“These aren’t easy times,” he says. “But we significantly changed the psychology of the markets by finding more bushels.”
 
 
A Look at the Soybean, Wheat Markets
Not much action was seen in the soybean market this week, Gulke says.
 
“They didn’t lose much during the report debacle,” he says. “From a pure supply-and-demand perspective, we can afford to lose a million acres of soybeans. That’s why beans didn’t get excited with the report came out.”
 
During the last few weeks, he says, wheat has lost 100% of all the gains made in the last year. “It’s not unlike wheat to do that. Once it turns, wheat can go up for no fundamental reason at all.”
 
Now that the crops are planted and wheat harvest is in, Gulke says we now have a situation in the marketplace where these markets can go their own ways.
 
“There’s a lot to uncover yet out there, but it’s nice to see the grains recover somewhat and I don’t think that we should ignore that.”
 
More Market Info Coming Soon
USDA will release its monthly Crop Production report on Tuesday, July 12 at 7:30 a.m. Gulke says this report will shine even more light onto the actual size of the U.S. crops.
 
“Weather has improved and we have heat units, so it will be interesting to see what USDA does with yield numbers,” he says.
 
 
 
For More Information
A book from the Gulke Group helps producers understand technical trading factors and how to spot market trends. Learn about the book.
 

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