Gulke: Soybean Buyers Might Flock to U.S. As Dollar Dips

Gulke: Soybean Buyers Might Flock to U.S. As Dollar Dips

Amid low commodity prices and struggles in South American countries, President Jerry Gulke of The Gulke Group says China might make plans to buy more U.S. soybeans.

“Do you really trust Argentina and Brazil and some third-world country that’s falling apart at the seams to honor their contracts and be able to deliver like they should?” Gulke tells “Top Producer Podcast” host Pam Fretwell in an exclusive report airing later this month.

“We need to eat soybeans every month around the world, and certainly in China. It was one thing at $14 soybeans and $7 corn. I’m going to go look for a 10% reduction from currencies. But when we get down here to $8.50 soybeans and $3.50 corn, the price is pretty cheap for that commodity. You can afford to pay a premium per se, it isn’t very much, and even though we’re competitive, they may come to us anyway.

“ That’s what we need to watch for,” he continues. There’s a point where you pay for quality, you’ll pay for assurance that it’s going to be met in a timely fashion.”

NEW! Bookmark the new Top Producer Podcast and listen each Wednesday for the latest business news and advice from the editorial team of Top Producer magazine. Our debut segment—available for listening now—features Aaron Johnson, COO of Farm Credit Illinois, who applies 1980s business lessons to today's environment.

Since the dollar saw highs in March and April, its value largely has moved sideways.

“The price action kind of dictates this thing is looking a little weaker than what it has in the past,” Gulke explains. “That’s what we need to change the relationship between Brazil and the U.S. I think a lot of people have been watching the interest-rate discussion. Are we going to raise rates this year, or aren’t we going to raise them? Some say we can, and some say we can’t. I think the dollar has built in the presumption that there will be an increase in interest rates. That’s usually bullish for the dollar because you get more money in interest rates on that dollar, even though it still isn’t very much.”

Those factors suggest the dollar’s value will trend lower through the end of the year.

Click the play button to hear our debut episode of "Top Producer Podcast" featuring Aaron Johnson, COO of Farm Credit Illinois. He applies business lessons from the 1980s to today's ag business  environment:

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Spell Check

Greensburg, IN
9/17/2015 08:06 AM

  Apparently Jerry has ran out of bullish things to say about crop size. So he changed to the topic of the U.S. dollar and how the foreign buyers going to "flock" back to the U.S. & begin buying all of our commodities and price will rise. That like saying when when we get a drought price will rise. The question is when will we see that 10% reduction in U.S. dollar strength? How soon? This crop year or next? Predictions are great if they have a timeline, but anyone can make general statements. I am afraid we'll going to be disappointed waiting on a dollar dip with or without interest rate increases. We lost a huge chunk of this new crop year business already to S. America (because of their weak dollar). Any one want to bet we will see record sales/inspection the rest of the marketing year cause that's what it will take to match current estimate on exports. I will bet we get weather scare (next season) before we see any substantial decrease in U.S. dollar.


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