Finally, the grain markets provide some good news. For the week ending May 29, July corn prices were up nearly 8¢, July soybean prices were up 7.5¢ and July wheat prices were up 12.25¢.
“I’ve been advocating patience for the past three weeks in making any major decisions, as soybeans and corn prices have been in a sideways choppy trading affair awaiting more information,” says Jerry Gulke, president of the Gulke Group.
May was essentially a choppy and go-nowhere month, he explains. If you look at the soybean price chart below, you’ll see prices ended the month not much better than where the month started.
“Corn has been positive for quite a while, but it hasn't gone anywhere,” he adds.
June is a critical month for crop production and price direction, Gulke explains.
“We've got some weather coming where it could get really warm in Kansas, Missouri and maybe even parts of southwest Iowa,” he says. “I think that's something we really need, but it's interesting to see it come this early.”
Gulke encourages farmers to continue to stay the course, without making major decisions.
“I think we just need to have a little more patience, and as long as the market runs higher, that's fine,” he says. “We have grain to sell and we're long in the field. A few pennies here and a few pennies there is going to help.”
Planting Progress and Crop Conditions
Gulke was in North Dakota last week and is now back on his northern Illinois farm. He says soil is still extremely wet in North Dakota, which means many acres will be prevent plant.
“The prevent plant payments are better than throwing men, money and machines at a problem – just to breakeven,” he says.
Technically Speaking by Jerry Gulke
Besides weather, the weekly planting reports where not all is so good in some states. North Dakota was especially hard hit with wet soils. Corn will likely be the recipient of PP (prevent plant option), which seems more economically feasible than fighting it on into late May and early June. That didn’t work well last year and spending labor, machinery and money to do the same thing again with an alternative seems sensible.
The question remains how significant corn acreage reduction will be and will it spill over into less soybeans and spring wheat. Odds are taking PP on soybeans will be a hard sell, making planting a better bet on that one.
A decision also will have to be made this week for corn PP in Michigan, Ohio, Indiana and Missouri. Corn’s attempt to rally to the upper end of the sideways trade showed a need for a weather premium. Next week’s planting progress will put a line in the sand for acres and likely be a market mover as well as weather thought of increasing heat, which we need, but not on that is prolonged or one that looks like a trend.
This year is not like last year! Capturing opportunities will be a focus. Monitoring technical signals that caught the down move that offered opportunities will be necessary moving forward as well as the markets make a move in either direction.
Find more written and audio commentary from Gulke at AgWeb.com/Gulke
Check the latest market prices in AgWeb's Commodity Markets Center.
Jerry Gulke farms in Illinois and North Dakota. He is president of Gulke Group. Disclaimer: There is substantial risk of loss in trading futures or options, and each investor and trader must consider whether this is a suitable investment. There is no guarantee the advice we give will result in profitable trades. Past performance is not indicative of future results.