As the market approaches Tuesday’s WASDE reports, Jerry Gulke suspects there will be some adjustments.
“The surprise would be if the government does not lower the usage of this year’s crop that we’re finishing,” said Gulke, president of the Chicago-based Gulke Group and a farmer in Illinois.
One reason for the downtick: avian influenza, which has now cost producers nearly 26 million birds as of May 6.
Those losses could also cut corn usage by perhaps 25 million bushels due to those culled birds. “Dead ones don’t eat. It’s not a big thing, but it’s not an increase,” Gulke said.
Ethanol usage has also slipped recently, and the trade remains concerned about the dollar and its effect on exports.
Listen to Gulke's full comments on planting, the livestock markets, the economy and WASDE here:
Supply remains another concern. Gulke noted that recent industry surveys have suggested that the USDA might adjust corn yields or acreage upwards. “If we do that, I think it gives us some problems,” said Gulke, with the extra production pushing carryover to the 2-billion-bushel mark.
The end result of all these worries and unknowns? A “negative vibe” in the market in the days leading up to this report. “Last May, we put the top in the market for the year” when the USDA abruptly adjusted its demand numbers, recalled Gulke. “I think traders are scared of that happening again.