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Friday the 13th Deals a Lucky Corn Price Scenario

June 14, 2014
By: Sara Schafer, Farm Journal Media Business and Crops Editor
Corn field cc060614
  

Not even a fearful day and full moon could spook the corn markets. After the close on Friday, June 13, Jerry Gulke, president of The Gulke Group, says farmers shouldn’t be fearful about future corn prices.

Even with a potentially record-breaking corn crop in the ground, prices seem to have found a bottom. Gulke says the market has already discounted the big crop. "The futures have come around, basis has improved and the cash price is higher," he says. "You can’t assume that just because you get a good crop, you’ll have prices down near $4 again next fall, until you look at the improved demand."

The demand picture is pretty darn rosy. "We’ve proved we can do a lot with $4 corn," Gulke says. "We are not curbing demand with today’s prices. Global demand is increasing and stabilizing."

Hear Gulke's full audio analysis:

 

On Friday, Informa Economics released its revised acreage and yield estimates. Overall, the theme was for less corn acres and more soybean acres. Compared to USDA’s March estimates, Informa increased soybean acres by 285,000 acres and decreased corn acres by 110,000.

The markets absorbed Informa’s report quickly on Friday, Gulke says, and corn rallied up at the close. "Informa tries to mimic what they think USDA will say," he says. "They played it safe."

A Time to Sell and a Time to Sit

With the current market situation, Gulke says, producers should hang tight. "If you have nothing sold, do you think this is the best price we’ll get in the next 18 months? I don’t think so," he says. "I think there will be better pricing opportunities."

He says if in its June 30 Acreage report, USDA decreases corn stocks, corn acres and the national yield, prices could be poised to jump. "Then you look at the possibility of $5 corn again," he says. "I think the odds are in my favor to do nothing right now and wait it out to see how the next 30 to 60 days work out."  

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