Small-scale traders who represent business professionals interested in commodities are standing aside as Congress discusses the U.S. budget and as worries about a fiscal cliff loom.
"Fortunately in the grain business, we have a situation where we’re still making money, and prices have not collapsed totally to where we’re now like the rest of the sector," Gulke says. "So the whole economic environment we’re living in seems to have an unknown factor that time has got to play out, and of course the fortunate part is that Jan. 1 is right around the corner. We’ll be a lot smarter when we know whether they let this economy fall apart or not."
In recent days, soybean prices rallied nearly 70 cents, Gulke says. But by Friday, markets had settled.
"We’ve had a pullback so far this morning today pretty severely in corn, soybeans and wheat, all three," Gulke says. "And if we closed where we’re at, we would still have gains for the week, but nowhere near what we had earlier in the week."
While the fiscal cliff has people on edge, Gulke says, it’s important to view the agricultural sector with a long-term perspective.
"This is not just a small mom-and-pop business anymore," Gulke says. "This is big business for farming, and we’re going to have to use these tools and marketing to lock in a price. A good return on a lot of acres is a lot of money whether you hit the highs or not, and that’s the good news in agriculture right now."
Listen to Gulke's full analysis:
For More Information
See the latest market quotes with AgWeb's Market Center