Double-Edge Sword of Weather Affects Prices Again

April 21, 2018 04:48 AM

Spring is arriving a bit slower than normal for most parts of farm country.

“The transition from winter to spring has taken longer this year,” says Jerry Gulke, president of the Gulke Group. “It is hard to believe that in 30 days we should have the biggest portion of the corn crop and lots of beans planted, with spring wheat done.”

As of April 15, 3% of the U.S. corn crop was in the ground, this is slightly below the five-year average of 5% planted by mid-April. For spring wheat, 3% of this year’s crop has been planted, which is significantly lower than the five-year average of 15%.

How has this year’s planting progress affected grain prices? The markets were concerned for a while that it looked like we’d have a late spring, Gulke says.

“But if you look at our track history for the last three years, we haven’t won out,” he says. “We haven’t produced a bad crop because we had a late start.”

Because of the strong yields in recent years with wet springs, there are many people who believe you may start later in the spring but the fall gets extended out, Gulke says.

“I’ve seen some studies that frost date is almost two weeks later today in the Northern Plains than it has been in years past,” he says. “I don’t know if we’re getting complacent, the technological seeds are bailing us out or it has just been perfect weather.”

Gulke has seen a report from Elwin Taylor, Extension climatologist at Iowa State University, that shows this year’s corn production could be less than last year’s. But the national average yield for corn would still be somewhere between 170 and 174 bu./acre

“There are lower odds of getting a big crop,” Gulke says. “But I’ve said that before and every year we grow another big one.”

This yo-yo of spring weather will continue to moderate the grain markets. “It is generally difficult to get a rally in grains if machinery is in the field or about to be,” Gulke says.

In this week’s audio report, Gulke discusses South America’s soybean crop, the wheat market and Russia’s impact on it, Chinese demand and more. Be sure to visit on Monday afternoon, when Gulke will share his weekly “The Rest of the Story” column.


Read More

The Rest of the Story: May USDA Report Looms Significant

Gulke: Soybean Demand Remains Strong

Gulke: Media's Attempt to Influence Your Judgement


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