Corn, soybeans and wheat prices all moved higher as USDA's certified acre numbers were released this week. Look for increased volatility as new trading limits take effect next week.
Grains and oilseed prices rallied this week in spite of a generally dismal outlook for the U.S. economy. With increasing concerns over the size of the nation’s corn crop on top of already-tight supplies, the fundamental outlook looks rosy. Coupled with a strong technical picture now, the market is showing strong signs of weekly buy signals, says Jerry Gulke, president of the Gulke Group.
Click to hear the interview with Jerry Gulke.
"What would create a problem is a total collapse next week because something happens in the economy so who knows. But we could have some big moves next week because on Monday the corn permitted limited goes to 40 cents/bu. We’ve probably got some wild times ahead of us yet as we get influenced by the outside markets and we continue to find out what’s out there with the growing crops."
Meanwhile, USDA released its first certified acreage report for this year and it shows more than 10 million acres across the nation were claimed for prevented planting. This number is for all crops, but it indicative of the challenges farmers have faced throughout the 2011 growing season, regardless of the crop.
For the crops that are growing yield estimates from private firms are coming in almost daily. And each one seems to be getting worse than the last. "IF you look at the weather maps, the precipitation that has fallen the last 30 days, you can say that the best 1/3 of the Midwest growing region is lacking for rain, including the central part of Illinois where the best crops are grown."
Gulke says the further north you go, the better the crops look. The next 6-10 days are critical and the outlook for moisture doesn’t look terribly promising. It’s eerily similar to 2010. The only difference is that supplies were not as tight heading into harvest.