Keep Calm Despite Weather Talk, Market Volatility

May 28, 2016 07:00 AM
 
roller coaster

Given the threat of La Nina, crop concerns in South America, and typical springtime volatility, Jerry Gulke has some timely advice for grain marketing novices.

“It will be volatile, so if you have not been in the market before—if you have ignored futures and options before—now is not the time to learn,” said Gulke, president of the Gulke Group in Chicago, speaking to Farm Journal Radio’s Pam Fretwell. “You’ll get an education, but not the one you want.”

Why? There are countless factors in play right now that could dramatically affect the grain and soy markets in the weeks and months to come.

In the U.S., meteorologists and growers alike are wondering whether the growing season will be temperate or hot and dry.

In South America, the trade is still awaiting final word on production for Argentina’s soybean crop and Brazil’s corn crop, which were damaged by floods and drought, respectively.

Also in the U.S., farmers and the trade are keeping an eye on the quality of the wheat crop, which may have been compromised by spring rains, leading to scab and stripe rust.

“We may want to keep an eye on North Dakota spring wheat,” Gulke said. “We’re relying on them for some of the hard wheat variety, but (people) might be surprised at how much wheat didn’t get planted up there in favor of corn and beans. … We gotta keep an eye on that.”

It adds up to a more bullish perspective from Gulke, compared to other analysts.

“I’m just amazed at how many people who have been negative are still negative,” he said. “Every weekend we hear, ‘You gotta sell something here,’ and of course, most of us would be out of grain by now if we had done that. … Just hang in there and let the market do its thing.” 

Listen to his full comments here:

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Comments

 
Spell Check

bulldawg
Greensburg, IN
5/28/2016 02:53 PM
 

  Did Jerry mentioned the "B" word? OMG how his tuned has changed since 3/31. It only took a $2.50 dollar move in beans and $0.50 move in corn. So good to see the 3 yr bear run is over....at least until we over-produce world wide again and cycle reverses. In the mean time...let the market "do its thing".

 
 
Mark C. Daggy
Humboldt, IA
5/29/2016 04:12 PM
 

  The phony USDA reports of a massive and excessive over production in 2015 are now fizzling, and the real market is taking over. Once all of the cheap grain is made into ethanol and fed through livestock, those needing grain must buy at a much higher price. I have gotten no less than a dozen calls from the five Coop elevators where I have grain stored....pressuring me to sell my 2014 and 2015 corn crop. The cheap grain has disappeared and if we hold out grain prices will spike. The 1934 drought in California which slipped over the mountains and created the dust bowl of 1935 and 1936 through out the Midwest is a possibility for 2016. If the grain buyers scare the farmers and they sell, they will not have the grain to sell if the drought moves into the Midwest.

 
 

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