The lows may be in for old-crop corn, soybeans and wheat. Jerry Gulke comments on the price surge.
Old-crop prices for corn, wheat and soybeans have taken their seasonal dips and are swinging back up. Jerry Gulke, president of the Gulke Group, says grain prices have rallied now and have theoretically put a bottom in.
"I don’t know how high we’ll go," he says. But, the odds are good for those selling the three crops.
"There’s an old saying that 50% of the time you regain 50% of what you lost and 60% of the time you regain 40%. If this market is any good at all, it should give us the chance to sell corn, wheat and soybeans higher than the old high of Sept. 1."
Informa’s 2013 Acreage Estimates
On Friday, the markets were hit with a new round of acreage information for next year. Informa Economics released its 2013 U.S. Acreage Update.
Here are the forecast highlights:
- Corn 97.5 million acres versus 97.5 previously and 96.9 in 2012
- Soybeans 80.0 million acres versus 79.9 previously and 77.2 in 2012
- Cotton 10.0 million acres versus 10.0 previously and 12.4 in 2012
- All Wheat 56.8 million acres versus 57.1 previously and 55.8 in 2012
Informa is expecting 2013’s planted area for the major field crops to exceed last season’s large total by about 2.5 million acres. Gulke says the additional acres are mostly due to land coming out of the Conservation Reserve Program.
For the last several years, the number of acres in CRP has dropped. "We just can’t run out of CRP," Gulke says. When many farmers originally put land in CRP, corn prices were around $2.50, he says. "Now you’re looking at $7.50 corn. The good land was taken out some time ago, but the acres that come out next year will still produce something."
Of course, 2013 acreage numbers are still a long way from being final. "You can sell your crop one year ahead of when you plant it and one year after you harvest it. So, we’ve got some time to think about this," Gulke says.
Listen to Gulke's full analysis: