Between the weather reports from Brazil and the trade policy changes in Argentina, many are wondering how to handicap the South American corn and soybean crops this year—and its effects on U.S. prices.
Jerry Gulke, president of the Gulke Group in Chicago, says we may just have to wait and see what happens with the crop.
“We have probably a couple weeks left before the market gets real excited,” he said, speaking with Farm Journal Radio’s Pam Fretwell. “Just like here, you can run out of time. You can run out of time to make a good crop and you can run out of time to kill a crop. Pretty soon you get to the point where you say the best they can hope for is a crop like last year or less and that’s when the people start getting nervous out there. Let’s just hope that happens in South America.”
After all, as 2015 drew to a close, corn was making new lows and soybeans were down as well.
“We’re about 180 degrees out-of-whack from where we were last year,” noted Gulke. As tough as that is, does it mean that market has taken into account all the negative news regarding grain and soybean supplies?
Perhaps. “I think half this battle in price discovery is market psychology,” Gulke said. “What do the other people think our product is worth? Are they willing to stock up or are they willing to sit back and wait for cheaper prices?”
Listen to Gulke’s full comments here, including his thoughts on the livestock market and crude oil.