With strong corn yields expected, Jerry Gulke says prices are under pressure, but soybean yields are still up in the air.
As field reports flood in about the quality of this year’s strong corn crop, farmers need to brace themselves for the inevitable consequence: sinking prices.
"The market is telling us that at least in corn, we’ve got spreads of 80 million bushels than what the government has in store, so that could be a long bumpy road trying to find the bottom," predicts Jerry Gulke, president of The Gulke Group, speaking to Farm Journal Radio on Friday, July 25.
Hear Gulke’s full radio analysis here:
In places like North Dakota, where farmers have other realistic, although niche, alternatives to corn, he says many farmers might just consider other crops like millet, barley, sunflowers, or wheat when it’s time to plant again. "You’re looking at $2.88 a bushel for fall delivery. You subtract 80 cents if they don’t get any more heat, and they’re going to pay 80 cent a bushel grind charge or 60 cents if it’s commercial, you’re down to below $2 a bushel. You’d almost have to be nuts to sell that corn and turn around to pay to rent some more land at a known loss again."
Luckily, Gulke says farmers don’t have the same worries with soybeans. "At lot of old-timers say it’s rare that you get a bumper crop of both soybeans and corn," he says. But with 30 days left in the growing cycle, he says prices could easily shift if something happens in terms of weather events.
"That’s the one caveat left in the market," he says, noting the predictions for unseasonably cool weather in the Midwest due to a summertime polar vortex-type event. "We’ve got everybody thinking that there’s nothing can happen out there is going to kill this crop."