Corn and soybean futures took a tumble at week’s end, falling 11 cents for December corn and 19 cents for September soybeans, but Jerry Gulke doesn’t sound terribly worried.
“An old trader just told me, ‘All this is just shaking the loose leaves off the tree,’” says Gulke, president of the Gulke Group in Chicago and a farmer in Illinois. “In other words, the guys who are playing the games don’t have the money. They’re just testing the market, and you blow them out on the up and you blow them out on the downside.”
The true price, of course, ends up somewhere in the middle, as the recent market trends show. “We got too cheap in June. And then we rallied up and all we heard about every day was rain,” Gulke says. … We probably went too far because of the hype.”
Sometimes it's farmers who get caught, sometimes it's money managers.
“It’s the psychology of the marketplace it does that to you. You get really bearish at the bottom and you get bullish at the top,” Gulke says. “In my heart, I don’t think this is the top of the market, but I’m not going to risk my farm on it.”
Listen to Jerry Gulke’s full comments:
Where will prices settle? It’s too soon to tell, given the time remaining until harvest and the wide spectrum of crop conditions right now, but Gulke sounds optimistic.
“I don’t think we’re going to see new lows again. I think we’ve dodged a bullet in agriculture. Had we had a huge crop and not this drowning out and the prevent plant that we think is coming yet, we probably would have gone down to $3 for the futures,” he says. “I don’t think you’re going to see $3 cash again.”
Are you feeling bullish or bearish on corn and soybean prices these days? Let us know in the comments.