The European economic situation temporarily gave a boost to the grain market this week. When the European central bank infused money into financial institutions earlier in the week, other countries jumped on the band wagon to loosen up credit, says Jerry Gulke, president of Gulke Group.
"The initial impact on the United States was that the dollar had been strong and the Euro weak, but people reversed their positions. So then the dollar was weak and that helped grain prices. But when all was said and done, corn closed lower for the week.
"But soybeans, which are much more susceptible to the currency valuations, actually closed higher for the week as well as wheat," he explains. "So in our positions, we had a lot of grain sold back in September."
He says looking back on that, soybean prices had dropped $3.74 from the highs in September to the low earlier this week before the news from the European banks. Gulke says looking at the trend line, if that pace were to continue, then soybeans and corn were set for a significant fall. However, he says that prices should stabilize somewhat, although the jury is still out on that.
Listen to more of Gulke's audio report here.