Grain Prices Succumb to Open Harvest Weather In Spite of USMCA

09:13PM Oct 19, 2018
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Corn and soybean prices both clawed their way higher to start the week. But, they lost steam and tumbled. For the week ending Oct. 19, corn prices were down about 7¢ and soybeans down about 11¢.

“The market realized there is open weather coming,” says Jerry Gulke, president of the Gulke Group. “We talked last week about the snow in North Dakota and South Dakota. But when you have 65 degrees, it disappears.”

Other areas of the Midwest also experienced harvest-friendly weather. Gulke, who farms in northern Illinois, was back in the combine on Friday. He hopes to have soybean harvest wrapped up in the next few days.

From a precipitation standpoint, the 6-to-10-day forecast shows some dry days for the western Corn Belt.

6-10-day precip forecast

Much of the grain the farmers are harvesting will head straight to the grain bins, Gulke says. In visiting with farmers, he knows many plan to store their beans and sell their corn. “They are storing and hoping for better prices down the road.”

Even with the recently signed U.S.-Mexico-Canada Agreement (USMCA), demand for U.S. corn and soybeans remains a huge hurdle for prices. In the short-term, stocks—especially soybean stocks—will continue to grow.

“Our stocks in beans will be horrendous—bigger than any time in my lifetime,” Gulke says. “There’s just no way of getting out of this pile. Once the crop is in the bin, there are no more crop scares. You just have to deal with the supply.”

Gulke says farmers should weigh their on-farm and commercial storage fees, upside risk and downside risk. Their marketing plan’s goal should be to capture the carry in the market.

“These are not easy decisions to make; we need every nickel we can get,” he says. “The bottom line is it is your grain and you make the decision.”



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