When it comes to today’s USDA numbers, Jerry Gulke says farmers need to look at what is not being said.
“Today’s report didn’t tell us a lot other than the fact that the USDA is scared to do anything with yields, because depending on which part of the country you talk to, the good corn is really good and the bad corn is really bad,” says Gulke, who is president of the Gulke Group in Chicago and a farmer in Illinois. “Unless you’ve seen it yourself, you can’t imagine how bad the bad stuff really is. I suspect the government will have no choice but to lower yields. Even I can figure that out, looking at water in Indiana and Illinois. But they didn’t. They left the yields the same.”
Instead, USDA relied on acreage adjustments to lower its production forecasts by 100 million bushels. “If you read between the lines and try to figure out what they are thinking, they’re saying, ‘Well, we’ve got some corn that’s going to be dead,’” Gulke says.
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Those numbers, along with strong demand and smaller carryovers, offer hope for corn prices, according to Gulke. “It confirmed what most of us already knew: The crop is getting smaller,” he says.
When it comes to soybeans, Gulke says it remains to be seen what happens with the weather and the effect on yields, but he notes that the talk of big carryovers has stopped. “The good news is for new-crop beans, they’ve got the carryover down to 425” million bushels, says Gulke, who adds that number could drop another 100 million bushels or so, depending on prevent plant and other factors.