The corn market's recent dive looks to be near a bottom, says Jerry Gulke. If the recent downturn is enough to bring buyers back en mass remains to be seen.
It's still too early to tell if the recent reversal is enough to bring corn buyers back, says Jerry Gulke, president of the Gulke Group. But the last few weeks haven't hurt the chances that it may happen.
There's still a lot of unkowns in the market with corn harvest still in full force. And perhaps the bigger question is how many corn acres are actually out there.
"We won’t know anything until USDA writes it on the wall in blood what the actual yield is this year. We also may have lost 1 mill to 1.5 mill acres."
Where those numbers come in remains to be seen, he says. In the meantime, farmers have to deal with the now. And now, the numbers are far below where they were a year ago at this time.
"If we’re not close to the bottom, I think we’re close enough now that you may as well wait for now to see what the report comes in. I’ve looked at the analysis quite a bit and we may find that it is what it is and the government may not be too far off with their numbers."
Informa Ecnomics released their estimates earlier this week. Their numbers were close to USDA’s numbers last month, but their recent track record for October estimates have been off.
"In the past six years they have had a tendency to overestimate the corn yield. The come in about 2 bu. over what the government comes in with. They estimated about 149 bu./acre, so that means, based on the history, the government could be looking at a 147 bu./acre yield."
The chances for a bearish report next week are about 50/50, Gulke says. And it’s very possible that the bearish news has already been built into the market.
More in Gulke's interview on outside market influences and what this may mean for Brazil.