"December corn is back up near its highs for the year," says Jerry Gulke of the Gulke Group. "I’d like to see a Friday close over $4.051/2—then on Monday, traders would be worried about it going higher."
"As I point out in my upcoming Top Producer Market Strategy, due out Aug. 4, supply and demand are in critical balance now. We need an outstanding crop. The weather guys seem to agree we’ll probably close out July in good shape, but these are futures markets and there’s still a risk of a dry, hot August. We haven’t really tested these new GM hybrids under those conditions since 1998, and they have changed quite a lot since then.
We should not see a close below $4 now; if we get up, say, near $4.30, then people will start thinking ‘do I want to risk 30¢ down to the $4 support?’"
Although beans look good right now, it’s rare to get a good crop of beans and corn in the same year—at least in northern Illinois, says Gulke. What’s left of summer weather could ding soybean yields more than corn. "Take the yield down to 40.5—just 2 bu./acre less than expected—and we’ll have supplies down near the critical level and beans won’t trade below $9."