With the news that USDA sees higher usage of corn and soybeans than the trade expected, this summer’s weather—and eventual yield—will be “critical,” according to Jerry Gulke, president of the Gulke Group in Chicago.
If weather causes even a small drop in yield, it could change the price situation very quickly, particularly for soybeans.
“If we drop 2 bushels (of soybean yield) and we harvest 80 million acres, that’s a reduction of 160 million bushels” of soybean production, Gulke said. “All things being equal, if you subtract 160 million bushels from the projected carryover of 290 million, you’ve got 130 million bushels of beans.”
“That’s not $11 beans,” Gulke said.
Listen to his full comments here: