Gulke: Markets Marking Time Ahead Of NASS Report

September 9, 2017 04:00 AM

The corn and soybean markets put in price lows at the end of August, says Jerry Gulke, president of the Gulke Group. Now, traders want to know whether they’ll hold after USDA’s Sept. 12 reports from the National Agricultural Statistics Service (NASS) in which only mild changes in national average yields are expected. Even farther down the road, the October reports from NASS could also shape price movement.

“The Tuesday [Sept. 12] report is kind of looked at as being a ho-hummer, maybe,” Gulke explains. “The average trade guess is that they’ll probably lower corn maybe 1 ½ bu. or so. I think the average guess is 168.2 bu. per acre versus 169.5—a feeble attempt to kind of be on the same side as USDA.”

Meanwhile, soybean yields are projected to stay relatively firm even as demand remains strong.

USDA “may drop [the national average yield] a little bit, maybe 6/10 of a bushel, which is hardly much of a change at all,” Gulke says. “Of course, the ending stocks in beans could come down again because we’ve had good demand this year more than expectations. It seems like we’ve done this now four years in a row.

He continues: “I think the key in soybeans will be, can you lower the carryout of last year, which ended on Aug. 31, which is the carry in. If you drop 30 million bushels, that’s about a half a million acres worth of production. That helps the soybean situation. I don’t think it’s going to happen.”

Also on Tuesday, FSA will announce in the afternoon updated planted acreage for both crops. Gulke notes the market expects less corn acres and more soybean acres—up to 1 million more in Informa’s estimation—when the figures are announced.

Continue to monitor the U.S. dollar for clues to the nation’s overall economy, Gulke says. Although the dollar’s value has been falling this year—which should theoretically make U.S. corn, soybeans and wheat cheaper for international buyers—commodities haven’t rallied.

“It might be [an issue of] who has the stocks and how cheaply are they willing to sell them, rather than the value of the dollar,” says Gulke, pointing to strong production in South America and Ukraine. “When you have overabundance of corn and soybeans, it’s a matter of who can sell it the cheapest. When countries artificially place values on things, that hurts.”

To receive your own copy of Gulke’s “25-Year U.S. Dollar Index: Political Reality” chart, email

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Spell Check

Greensburg, IN
9/11/2017 10:15 AM

  I'm not sure it is accurate to say that Mr. Gulke brave enough to say he was "one of the few" touting lower yields. August trade average guesses was a collection of 20 analysis that was below USDA's July estimates by 4.7 bpa. And now the trade average estimate is below USDA again by 1.7 bpa for tomorrow's report. I notice though Jerry Gulke never offered what he thought might be the U.S. corn yield. It is east to say I think USDA is too high, but to state the yield & more importantly what does he believe carryout will be? If production is down 200 million but demand is lowered `100 million, what will the affect be on price, which is what we all want to know.

Cayuga, IN
9/9/2017 06:44 PM

  As long as the port in Wilmington can receive shipments from Brazil and Argentina look for grain prices to be below break even. Corporations are not people.

9/9/2017 03:21 PM

  It hasn't rained more than enough to just settle the dust over most of the Midwest since the Pro Farmer Crop Tour. Not much rain in sight for another week. Gulke is debating whether production numbers will come down any if at all. He's going by past experience that the "ones in the know" won't face reality until January if at all. With almost no rain for a month-do you really think soybean yields will be effected negatively by less than 1/2 of a bushel??? Markets just just can't help themselves from squeezing every last bushel from financially strapped farmers!! Soybean usage has been underestimated for 4 years in a row- all at the farmers expense of receiving less than they should have. Gulke is one of the few who has been brave enough to stick his head up and say I just don't think the crop is as big as they say it is.


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