Gulke: Harvest Delays Send Grain Prices Sideways

September 24, 2016 04:54 AM

Regardless of strong yields, prices are finding a footing. What farmers need now is some traditional fall weather. 

With October only a week away, harvest progress and conditions are consuming the market’s attention.

As of Sept. 18, 9% of the U.S. corn crop has been harvested, which compares to a five-year average of 12%. Farmers in states like Kentucky, North Carolina and Tennessee are significantly ahead of schedule, while the rest of the Midwest is still just getting started.

Soybean harvest progress is right in line with the average pace. As of Sept. 18, 4% of the nation’s crop has been harvested, which is only one percentage point behind average.

Corn and soybean prices were both down for the week, says Jerry Gulke, president of the Gulke Group, but prices are relatively stable.

“We’ve been kind of going sideways here,” he says. “Here we are just marking time—the market is concerned with how soon we can put this crop away in the bin.”

Harvest delays caused by heavy rains and flooding in states such as Iowa, Illinois and Minnesota, are actually helping remove some of the negative attitude in the marketplace, Gulke says: “The elevators were worried how they were going to store all the corn, these delays looks like they might help them deal with movement of this huge crop.”

Luckily, Gulke says, the excessive moisture farmers are receiving now shouldn’t knock their yields severely.

“Getting rain now means you pretty much know what you got out there,” he says. “You need to kill this crop in the spring or the summer. It is pretty hard to do away with a lot of corn in the fall just because of the moisture.” 

These weather challenges can still create quality issues, however. Gulke says he's seen photos and heard reports of some corn cobs deteriorating from within, mold damage and stalk issues.

“It almost feels like we are still in the summertime with these high temperatures,” he says. “What we need is for fall to come on. Once you cool it down, it will help the situation.”

While a lot of the mold can blow out of the back of the combine, Gulke points out, it does raise concerns that some infected grain could be rejected by buyers or farmers will face storage issues.

“We just don’t need any more 85-degree temperatures and high humidity,” he says.

South America Crop Update

While farmers in the U.S. are focused on harvesting a potentially record crop, traders are also watching crop conditions in South America.

“We pretty much expect that crop in South America to be average,” Gulke says. “Argentina will increase corn acres significantly at the detriment of soybeans, but Brazil could make up for some of the shortfall in beans.”

More time will be needed to see how those countries’ crops eventually turn out. “We really don’t get excited about South America’s crop weather until December,” he says. “We have a lot of things to think about here.”

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Spell Check

Goldfield, IA
9/25/2016 08:13 AM

  Getting rain now CAN affect your yield. Lots of promising high yielding fields in NC/NE Iowa are now sitting under water. Beans are really going to take a hit in yield. Can't sit in water for days without pods being affected. Will be interesting to see what those 60-70 bushel fields end up yielding. Still raining today.

Greensburg, IN
9/25/2016 05:43 PM

  Excessive rain is never wanted at harvest and can affect yield due to field loss, but quality can be a big problem as well. However quality issue are seldom a bullish factor especially on beans. Poor quality takes a much greater effort and bushels to blend off. We need good quality if we expect to reach the big export number. It's going to be a long harvest for those who saw heavy rains this past week. I feel for them.

Old S.W. MN. Farmer
Worthington, MN
10/1/2016 10:39 AM

  I have never been accused of being real smart but have been told I use too much common sense? So here goes. Why would anyone have planted corn on corn with the market below cost of production b-4 a seed was planted plus not forecast to get better til beyond 2016/2017?? Seems to B the same philosophy of finishing the hog heavier in spite the market went dn. due to excess production,or keeping more heifers back because the milk price is dn. due to excess inventory just to keep the ck. the same size,not taking a moment to digest the reason for lower prices. Perhaps the answer is actually-- (IN SPITE OF) Will it ever change?? Not in my life time.As my Father said years ago--Most farmers tell how independent they R as they hold both hands out to the Gov't. when things go bad,how about we just get Govt. out of Agriculture,let supply and demand dictate what/how much we raise and all consumers start paying a fair price 4 the food/ag products they consume.I can feel no sympathy 4 those who contribute to the over supply to the detriment of every producer!!!!!


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