Midway through harvest, with farmers wondering whether they should wait until prices go up before selling their corn and beans, Jerry Gulke, president of the Gulke Group in Chicago, is advising farmers that it would be better to wait.
“Anything previously made via cash forward contracts for this year that you deliver … will cover some of your cash flow," he says. "I would think at least 35% to 45% of the 2016 corn/soybean crop was sold in June at much higher prices, and that should lessen the need to sell much off the combine. Then let this thing transpire a bit and see what the weather is like. We’ve got time on our side."
And although that’s not to say that prices couldn’t dip lower before they go back up again, Gulke says holding both corn and beans may be the better option.
"Although some people think that we’ve already make the harvest low in corn and beans, that remains to be seen,” he says.
Prices could bottom out in the next two weeks or in the first part of October, or later, Gulke says.
For most people, “the real crunch will come in March, when they have to negotiate a loan with their banker,” he says.
Farmers may be in a better position to negotiate if they don’t make the mistake of selling corn and soybeans before the prices go back up. Soybeans, especially, have the potential to rally, Gulke suggests.
“Don' t give away all the beans and have nothing left to sell if the price rallies by $1 or $1.50,” he says.
Listen to Gulke’s full commentary here: