Jerry Gulke has been waiting for a rally, but this week’s surge in soybean prices came earlier than expected.
“I thought we’d get this kind of rally in June rather than now,” says Gulke, speaking with Farm Journal Radio’s Jo Windmann, “but we had some problems in South America.”
Those weather worries pushed corn prices above $4 this week and soybean prices over $10.
“It was time to sell something,” Gulke says, but he knows how difficult that can be for growers. “If you’re holding old-crop corn or beans and you’re wanting to sell new-crop corn and beans, well, which is it? Are you bullish or not? If you’re bearish, then get rid of the old crop. Don’t store it. Let them have it at $4.”
He predicts weather will prove to be an ongoing concern in the U.S. and South America this year.
“I suspect when we’re all done and deep into the harvest in South America, they’ll find that corn is not all it was cracked up to be. That we didn’t save it at the last minute (with timely rain),” he says. “And there lies the problem we run into. As producers, we understand this. Those weathermen and analysts at the board of trade--they’ve never grown a kernel of corn, and they’ve never (watched) it grow. They’ve never experienced the irrational exuberance of a good crop and the agony of a defeat when you find out your crop isn’t there and the market has already discounted the fact that there’s going to be enough corn. It’s a tough situation to be in. Fortunately, this time, we came out pretty well.”
Gulke urges growers to keep an eye on this week’s peaks in the days and months ahead. “We should not exceed these prices,” he says. “If we take these highs out, then we’re on a roll.”
Listen to Gulke’s full comments here, including his thoughts on how to evaluate whether a rally will last.