The grain markets sank lower again this week. December corn prices dropped 14.5¢ for the week ending Sept. 6. November soybeans dropped 11.75¢ and December wheat was nearly unchanged.
Considering so little corn harvest information is available at this point, Jerry Gulke, president of the Gulke Group, says this drop for corn prices is significant.
“The demand side of this equation is getting more and more attention, and we're just not competitive,” he says. “There is global demand, but we've lost market share—and the market sees that.”
Additionally, the crop ratings for the last few weeks continue to hold. “Most of us thought crop ratings would start to match what Pro Farmer saw during the Crop Tour,” Gulke says. “But apparently to the USDA guys, the crops still look great.”
The markets have seemed to discount the chance of an early frost, Gulke says.
“I don't know if the first frost comes at a normal frost date or not,” he says. “On my farm, a nor-mal frost is around Oct. 12, which gives me another month. That'll help maturity quite a bit. In some places of the Corn Belt, a normal frost will be a problem.”
However, the market looks at the potential of the crop, Gulke says. At this point, a normal frost won’t be as devastating, and it was predicted earlier this summer.
“When you look at how these markets have collapsed, that we’ve lost any thought out there that we’ll come to any kind of an agreement with China,” Gulke says. “Bottoms are made when the psychology is the worst, and we’ve got to be close because the farmer psychology, the economic psychology and banker psychology is all about as bad as I've seen it in years.”
USDA Report Out Sept. 12
On Thursday, Sept. 12, USDA will release its monthly round of Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.
In this report, Gulke says, USDA plans to use average ear weights from the last several years to determine its forecast.
“So, our numbers may not fall as much, if they do fall at all,” Gulke says. “I would personally be surprised if they raise the yield on anything, especially beans. Pro Farmer saw it and I’ve seen it in my own fields, any beans planted in June don’t have the pods and the beans aren’t as plump.”
The October report will have harvest results, Gulke says, and will be a lot more accurate.
Find more written and audio commentary from Gulke at AgWeb.com/Gulke