It’s been a long time coming. The corn market has finally seen some positive technical support.
After piles and piles of negative news, the corn market showed a little glimmer of hope this week.
From a technical standpoint, Jerry Gulke, president of the Gulke Group, says the corn market made a positive move.
"This week, in March corn, we took out last week’s lows and also touched $4.10 again," he says. "In response, we have lifted all of our hedges, which may come as a surprise."
Hear Gulke's full audio analysis:
Overall, Gulke says the grain markets have digested a lot of negative news recently – everything from China rejecting some GMO corn and the acknowledgment the 2013 crop was huge. "We think, at this point, we have discounted all of the negative news," he says.
To gain some perspective on the current market situation, Gulke and his colleagues have researched the grain market movements at this time of the year in 2008.
"That year was very similar to now," he says. "In December 2008, we had 100% of our old-crop corn sold and about 80% to 90% of our 2009 corn sold because of the financial debacle and the liquidity crisis. The market was negative, just like this year."
He says they lifted their hedges. Then, the market rallied from around Dec. 5 to Jan. 6, by about $1.20. Gulke says in 2008, prices were around $3.50. "We rallied into January, but the January report was the final nail in the coffin. We didn’t close higher again for 2009 corn in 2009."
Between now and the end of the year, Gulke says trading is pretty light. "A lot of people don’t want to have positions on," he says.