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How Much Steam Is in the Grain Price Train?

March 8, 2014
By: Sara Schafer, Farm Journal Media Business and Crops Editor
money train
  

Corn, soybean and wheat prices showed impressive gains this week.

What a week. Prices for corn, soybeans and wheat rallied, with some showing 30- to 70-cent gains. "We had a 30-cent move up in old-crop corn – in one week," says Jerry Gulke, president of The Gulke Group. "Three months ago we thought that would never happen again."

With corn prices flirting with $5 again, Gulke says he sold some old-crop corn on Friday. "That may be a mistake with the way things are going," he says. "But that keeps with my management plan of selling old-crop corn."

Bean prices are also showing considerable strength. "If you look at July soybeans, it is almost just straight up," he says. "The big catalyst there was everyone was expecting China to cancel bean shipments from the U.S. and buy the cheap beans from South America, and it just isn’t happening."

With the constant increase in bean prices, Gulke says there may be a chance everyone has grossly underestimating the demand for protein worldwide.

Wheat prices showed significant gains for the week. This was due to the unrest in Ukraine, Gulke says. "They have admitted they aren’t interested in selling anything until things stabilize," he says.

Hear Gulke's full audio analysis:

 

Yet, Gulke says prices were headed up before the Ukraine situation unfolded. "But, Ukraine adds more uncertainty," he says. "We now have a competitor who may not have a crop, so we’ll benefit from that."

USDA Reports Out on Monday

On Monday, March 10, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates.

"USDA will have to do something with beans," Gulke says. "Export sales are almost equal to what we will do for the full year and it’s only March. We have until the end of August for exports, so something has to give."

Gulke also expects USDA to increase corn and wheat exports.

Overall, the market needs to see a positive round of reports to keep up its current momentum higher. "We don’t want to see any negative news," he says. "Negative to me would be if USDA didn’t change corn exports or tighten up stocked for soybeans. We need to watch how the markets close on Monday."

 

Have a question for Jerry? Contact him at 815-721-4705 or jerry@gulkegroup.com.

Gulke Group is hosting a workshop about technical analysis, as well as a outlook conference March 25-26 in Chicago, Ill. For more information, visit www.GulkeGroup.com.

For More Information  
AgWeb.com will have all of the important USDA reports, as well as analysis, on Monday after the reports release at 11 a.m. CDT.

See current market prices in AgWeb's Market Center


 

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COMMENTS (1 Comments)

PullMyFinger - Chappell, NE
All these gains in spite of every farm publication calling for a return to 18th century grain prices for the past many, many months. Go figure.
8:42 PM Mar 12th
 



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