Crops: More Woes Ahead; Livestock: Setting Up for Price Improvement?

Crops: More Woes Ahead; Livestock: Setting Up for Price Improvement?

“The market really fell apart this week; we were really perched on a ledge,” says Jerry Gulke, president of The Gulke Group. “We were hugging support; when it rallied up, we thought, “Okay maybe that’s  it on the downside.’ Then it falls back down again. If you knock on that door often enough somebody will open it. And somebody did yesterday and today.”

Gulke adds that any time you close at new lows for the year, that’s not a good omen. “The repeated loss of a few cents here and a few there is the leaking effect: All of a sudden $4.20 corn is gone and you wonder where that went,” he says. “It’s going to be a while before we turn this around, We need a catalyst and maybe June 30 will provide that — maybe the plantings report will show farmers turned away from corn. 

“What we don’t want to see happening is we plant too much of everything,” says Gulke. “A million or two million acres of soybeans at the expense of corn doesn’t mean much one way or the other because each million acres of beans is another 46 million bushels or thereabout. Another hundred bushels of beans won’t make much difference; we won’t see a better price until there’s a demand surprise or South America has a crop problem.” 

Gulke believes some farmers are making last minute changes and maybe the USDA corn acreage number will prove too high. Some of the small grains are lower cost to plant and maybe can even let you make some money, he says. One other change he notes, however: “It’s cheaper to grow corn in eastern Canada than it is to import it now, given the change in currency value. If futures are $4 and it costs a Canadian farmer $4.80, now suddenly it makes more sense to grow it than buy it to feed your hogs or dairy cattle.” 

Avian flu brought a spark to the livestock markets: Tuesday’s cold storage report found less beef than expected. Then add the effects of bird flu: “Figure 7 million dead turkeys, plus it takes a couple months to turn the turkey barn around. Then figure some pullet producers have been hit, too, reducing replacements. Maybe there’s going to be more demand for pork.”

Listen to all of Gulke’s comments via the link below. 

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Spell Check

Emmetsburg, IA
4/26/2015 09:20 PM

  No I don't want to feed the world and I'm a Farmer I want to feed my family and with 3.50 corn theres no money the problem with wanting to feed the world we are wrecking are country doing it. Cheaper corn will not make food at the store any cheaper.

Sioux Falls, SD
4/26/2015 12:15 PM

  Thinking lower crop prices will help feed the world is what happens when you don't understand basic economics. When crop prices fall we end up with less food...

Addison, VT
4/25/2015 08:59 AM

  Lower crop prices are the best thing that could happen .Don't all the farmers want to "feed the world".


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