Markets traded down Friday following rumors of a U.S. purchase of Argentina corn. Market expert Jerry Gulke explains what this means looking ahead.
Despite an initial bullish reaction to the Oct. 11 USDA reports, the grain markets traded down Friday following rumors of a U.S. purchase of South American corn.
Jerry Gulke, president of the Gulke Group, says that now that USDA has given us some firm production numbers in both corn and beans, trade is switching focus to demand. Around midday on Friday, rumors surfaced of someone in the U.S. buying 600,000 tons of corn from Argentina.
"If you’re going to buy import corn from somewhere else, that takes away some demand from the perceived shortage of supply," Gulke says. "I tell people that a free market is not a fair market, and we love a free market until our ox is being gored."
Gulke says he’s concerned about what might happen in the market moving ahead, because USDA’s October World Agricultural Supply and Demand Estimates didn’t factor in the Argentina corn purchase.
"I think with USDA, they deal in facts," Gulke says. "They don’t deal in innuendos, so when that corn lands in the United States, then they’ll say it has been imported. Rumors don’t count for much except to move the market."
Gulke says that hopefully by next week, the truth will be sorted out from the rumors.
"The market is telling us a lot of things out there that I don’t like, and we’ll see how it pans out over the weekend."