Gulke: Are We Seeing the Start of a Sell Signal in the Dollar?

October 3, 2015 05:00 AM
Gulke: Are We Seeing the Start of a Sell Signal in the Dollar?

Jerry Gulke discusses the U.S. dollar, harvest yields, and the cattle market in the Weekend Market Report.

The stock market may not have liked Friday’s employment numbers, but the reaction--and its impact on the dollar--suggests good things for farmers in the month ahead, according to Jerry Gulke, president of the Gulke Group in Chicago.

“We have the beginnings of what we call, from the technical standpoint, a monthly sell signal in the dollar, which is exactly what we need,” said Gulke, speaking with Farm Journal Radio’s Pam Fretwell. “That would be the first sell signal in the dollar since we had the buy signal perhaps two months ago.”

A strong dollar, of course, has made farm exports, especially wheat, too expensive on the world market for many buyers. 

Listen to Gulke’s full comments on the dollar, harvest yields, and the cattle market here.

These movements in the dollar could strengthen currencies in other countries, such as the Brazilian real, making U.S. exports more price-competitive on the global market.

“That’s exactly the thing we need to see—not have our production get any better, but get a little less; have demand stay solid, and have us become competitive again,” Gulke said.

He pointed to the China’s recent record-high soybean purchase agreement with the U.S.

“That sends the signal that demand’s not going away just because China’s got 5% or 6% growth rate, instead of 10% or 11%,” Gulke said.

What sort of yields are you seeing in your area? See how harvest yields are shaping up and submit your own corn and soybean data to AgWeb's Harvest Maps.


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Spell Check

Josh Ryan
Vermontville, MI
10/4/2015 04:18 PM

  It's much simpler than trying to get everyone to band together. If you can't make a profit at the current prices then don't plant that crop. How efficient is it to disc under lettuce that isn't contracted. Sure you make more money on the crop you sell, but you still pay for the inputs of the crop you don't sell. PLUS now you are limiting the growth rate of your market. New customers have to wait 3 years before they can buy your product. Frustrate new buyers and decrease demand??? That doesn't sound like a promising plan. Again if you can't make money on 4 dollar corn don't grow it. Otherwise you are a non-profit organization.

Mark C. Daggy
Humboldt, IA
10/4/2015 12:42 PM

  Many farmers simply throw "shit" at the business wall, hoping some will stick. Hoping at some point farmers will realize they are in control of the one thing the masses cannot do without on a daily basis. Much like the lettuce farmers have done, they contract 3 years in advance for enough to make a nice profit. 3 years later when the contracts are due, they harvest only what was contracted and disc the remaining crop into the soil. The policy is....if you do not purchase sufficient lettuce 3 years in advance for a nice profit to the get nothing 3 years later during harvest. Controlling access to grains and raw food will produce a great income for farmers. The 20 to 30 cents increase in prices, because of the weak dollar is simply fly manure. Again shutting off all current and future sales until CBOT reaches $6 for corn, begin selling selling until prices drop below $5 and shut off 100% of all sales. Then holding off on all sales until the price of corn rises back above $6. Repeating this over and over until corn traders and buyers realize the price of corn lies between $6 and $5.

Western, NE
10/3/2015 10:07 AM

  In the words of a famous cartoon character, "Good luck with that!" A 20 or 30 cent swing in prices will do little to help fix the cheap prices we're seeing today.


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