As the growing season progresses, big unanswered questions remain on the minds of farmers and traders alike. How many acres will be harvested this fall? What sort of yields will farmers see? And how will the market react?
The answers all depend on the weather, which has left countless fields waterlogged and unplanted in Missouri, Indiana, and beyond. “The question that is being asked in the market is, ‘Are the bad spots getting bigger and the good spots getting smaller, or vice-a-versa?’” says Jerry Gulke, president of the Gulke Group in Chicago and a farmer in Illinois. “Is the bulk of the damage done?”
Perhaps—at least as far as the market is concerned, as it looks at the forecast. “I think the market is looking at the fact that it’s going to warm up, maybe clear up, but it’s not going to get to 100 degrees any place for a long time, and that’s good news for grain production in the areas that aren’t waterlogged—and for the areas that are waterlogged,” Gulke says.
But he acknowledges that much is still in flux for this year’s crop. “We need that sunshine, but we don’t need too much sunshine,” he cautions. “It looks like we are still in production discovery situation for the rest of July. It looks like we are going to pollinate things in great shape, although erratically in some fields, and then we get into August weather for soybeans.”
Listen to Jerry Gulke’s full comments:
Given the spectrum of crop conditions this spring, Gulke says going into the fields this summer will provide particularly useful information about what to expect in terms of yields. “As we start walking into these fields … we’ll see pollination, we’ll see silks, we’ll see ears being formed. You kinda get a better feeling than you do when it’s raining every day.”
Those observations will help with production discovery, but what about prices and marketing strategies? Gulke says it will be important to follow the Monday Crop Progress numbers from USDA.
“When the crop ratings stop getting bad, the price stops going up,” Gulke says. “We’re going to watch that a little, because suddenly you find a discovery point that says, ‘OK, from here, we need some solid evidence that it’s worse and maybe a lot than we thought or maybe not as bad, and maybe we overextended the price.’ That’s what price discovery is all about (and) that’s probably the process we’re in right now.”
Are you feeling bullish or bearish on corn and soybean prices these days? Let us know in the comments.