After months of dry weather headlining price movement, the markets are ready for a new story, says Jerry Gulke. "The 2012 drought has not vanished, but the grain markets see it as old news," explains the president of the Gulke Group. "We’re entering the period where we can fi nally put this dry weather behind us, at least for the time being."
For now, the market will focus on the weather in other parts of the world, especially South America and its impact on crop yields. Gulke says that if the crop does continue down the path of high yields, China will move in. "Once China gets its purchases from us covered through February, it might just vanish from our scene and move to South America," he says.
After months of falling, soybean prices have fi nally bounced—up almost 20¢. "The rally we anticipated for the last couple weeks in soybeans has materialized," Gulke says, adding that if soybean prices reach $15 and stay there, market support will be strong.
The soybean market looks good, but Gulke notes that any economic, political or crop problem out of South America could give it a jolt upward. He hopes the corn market does not challenge the current lows.
"We don’t want to see December lows taken out," Gulke says. "We want to see a winter rally pursue itself like it did last year. The December low almost matches the November low, which almost matches the September low. So now we’ve got three support areas in the corn market that surround that $7.15 price."