Market bottoms are made on bad news, says Jerry Gulke of the Gulke Group. "Just when the trade was focused on a corn crop that couldn't look better (meaning lower prices), USDA said supply is better yet and we'd better harvest a big crop. Meanwhile, on the heels of saying it has a big crop coming, China bought more corn--another positive.”
Kansas had some crop damage and there's a chance Monday's Crop Progress report will drop condition ratings in Kansas, Nebraska and Iowa, Gulke believes.
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"This week's low is now a line in the sand and the farther we get from that line, the more risk we'll have in the market,” Gulke comments. "We scaled back our 2010 hedges.
"Wheat was strong right in front of harvest—turns out it was because the Dakotas and Canada couldn't get spring wheat planted because it was too wet. Ultimately we may see more soybeans and/or canola planted on some of those acres.”
Soybeans likely will go along for the ride, says Gulke. "Soybean's line in the sand at $9.05 was tested and held. There are buyers under $9, providing support.”
"Looking at outside markets, despite easing off; crude oil is still in an uptrend. The dollar is weaker,” he says. "Monday will be a new day, but for now it looks as if the tide has turned to the positive side.”