After Thursday’s jolt of much larger than expected corn plantings, the market looks to be headed mostly downward, with just a dead cat bounce for corn at the week’s end.
“The world changed for corn yesterday,” said Jerry Gulke, president of the Gulke Group in Chicago, on Farm Journal Radio’s Weekend Market Report. “When you plug in numbers for acres at 93.6 million, you could end up next year of about 2.4 billion bushels of ending stocks," said Gulke, cautioning that even if corn eventually loses a million acres to soybeans, it won't help much. “We now need a weather-related crop yield problem," he said. "That is not a good position to be in."
Even so, corn was up slightly in the markets in what appears to have been a “dead cat bounce.”
Gulke’s advice? If farmers were hedged ahead of the report, they may decide if (or when) prices get even lower that they will pocket hedge profits on corn and plant soybeans. "In 2007, the last time we made big switches in corn, the planted acres actually got bigger in corn and smaller in soybeans," Gulke warned.
Listen to his full comments here: