Farmers hoping for a rally may find that USDA’s Wednesday report will provide the stimulus to break out of four weeks of sideways trading, according to Jerry Gulke, president of the Gulke Group in Chicago.
“The market is going to look for some fundamental reason for that to happen,” Gulke says.
For that to happen, the corn yield would have to drop a bushel or two, and excellent demand would have to continue or increase, reducing the carryout, he says. USDA’s World Agricultural Supply and Demand Estimates September report put corn yield at 174.4 bushels per acre.
If the USDA report increases the soybean yield by one or two bushels per acre, “we better see some of that eaten up in demand,” Gulke says. So far this year, each time USDA has increased production, demand has also increased, he notes.
Listen to his full comments here: