Gulke: Soybean Traders 'Nervously Long' As Argentine Crop Fills Out

February 4, 2017 04:00 AM
Gulke: Soybean Traders 'Nervously Long' As Argentine Crop Fills Out

Soybean traders are “nervously long” the market as they watch Argentina’s weather forecasts and wait for the crop to fill out, says Jerry Gulke, president of the Gulke Group. Prices for the oilseed took a hit earlier this week amid a rain event in the South American country. Rain fell where it was needed and didn't necessarily increase any flooded areas that weren’t already damaged.

“In the back of the minds of a lot of traders and end users globally is what happened last year,” Gulke tells “Weekend Market Report” host Pam Fretwell for the week ending Feb. 4, 2017. “All of a sudden [in 2016] it turned wet, and the crop deterioration in Argentina was much more than even the weather guys were talking about. … The bottom line is traders don't want that to happen again, so you’ve got them nervously long. We’ve got a lot of people on the speculative position long or positive the grains this year than we did last year. There’s always that thought in the media that wow, these traders could dump this stuff if it turns out to be a perfect crop over there. Well, we’ll see what happens.”

As the market watches radar patterns, soybean prices in the U.S. have begun to come down.

“We did rally all the way from the first of January all the way up, and we pretty much retraced 80% of that now,” Gulke explains. “Monday showed exactly what the weather guy said. It rained in the dry spots [in Argentina] and didn’t rain in the wet spots. And any rain in the wet spots what they’re saying now is the damage is done whatever that is … Those ponds then dry down and they fill back up again. So they’re saying those areas won’t get any bigger than they were before.”

All of the attention focused on Argentina reflects the important role South America plays in fulfilling global soybean demand.

“It just shows how critical the need for a good crop in South America is in spite of all the rhetoric this year about us having a record crop,” Gulke says. “Think what would happen if we hadn’t had a record crop this year. We’d be really concerned about the availability of supplies.”

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Spell Check

bad axe, MI
2/4/2017 07:38 AM

  You know Guys if this corn crop at $3.50 is worth about 47 billion it would take 1,447 years to pay off the 68 trillion that's owed on credit in this country. Gulke how are you going to eat, that's kinda a long time to go without food .

Canton, ME
2/4/2017 08:33 AM

  Boy Jerry, has trump pulled the wool over your eyes and these individuals that claim he's been the best president they've ever interacted with. Guess you don't talk to high-tech industry executives, probably some of the most brilliant and successful individuals on the planet. I believe you won't find them as enthusiastic about this guy! Also, as it's said 'the proof is in the pudding' and trump is dishing out a lot of contaminated pudding with many of his EOs!

Hinsdale, IL
2/4/2017 10:10 AM

  Complainers are alive and well. WOW.


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