Ahead of the long weekend for the grain markets, prices were mostly lower. Corn prices were down 2.5¢ for the week, soybean prices were down around 14¢ and wheat prices were down 9.5¢ to 19¢, depending on the contract.
Jerry Gulke, president of the Gulke Group, says the weather is weighing on the grain markets, as the general consensus for the forecast is good planting weather is ahead. At the Gulke Group member conference in late March, Drew Lerner, senior ag meteorologist and president of World Weather, presented his weather predictions.
“His outlook was farmers will get an opening in the first part of May for maybe two weeks,” Gulke says. “His comment then was you better get on the stick and get a planted because it's going to get wet later on in May.”
That sentiment is enforced by the recent National Weather Service outlook, which calls for above-normal precipitation in the Upper Midwest and Plains over the next few months.
Here’s the 30-day and 90-day precipitation forecasts from the AgWeb Weather section:
“I go out about 14 days for the weather forecast and that's about all the confidence I have because even this system that just came through the Midwest did not dump as much rain as what as what they were expecting,” Gulke says. “It's been my age-old experience that economists and weathermen are kind of alike—they keep predicting the trend until the trend changes.
“And we've just gone through this weather transition from winter to spring, which if you think about it for the last three or four years, seems to be a later spring and later fall,” he says. “The market is probably assuming that we're going to get the crop in because I'm sure everybody's ready to go.”
Switching gears to livestock, Gulke says the hog market has been on fire.
“When hog prices broke out awhile back, they just went straight up,” he says. “The markets tend to react very quickly, especially when is leaning the wrong way.”
Because of the disease issues in China, they are looking to the U.S. to purchase hogs. In addition, Gulke says, China is now looking to buy beef and other meat products from other countries.
“They can't buy all the hogs that they're losing if what we're hear is true, because transportation and logistics will probably prevent that,” he says. “So, I'm sure they're going to tell their people to eat a little more chicken and a little more beef and less pork.”
In his Technically Speaking column next week, Gulke will provide some charts and take a look at the grain market’s technical picture.
Find more analysis from Gulke and listen to audio commentary at AgWeb.com/Gulke
Grain Markets: The Calm Before the Storm
Jerry Gulke: Trade Deal or No Deal?
Jerry Gulke: USDA Shock and Awe
Check current market prices in AgWeb's Commodity Markets Center.