Farmers are holding tightly onto new crop corn and soybean supplies in hopes of higher prices returning in a post-harvest rally, but the herd mentality to marketing could come back to haunt farmers later, Jerry Gulke, president of the Gulke Group, said on Farm Journal Radio's Weekend Market Report.
“The thing to do last year was to not sell grain at harvest and hold it into the post-harvest, and in November we made the highs,” Gulke said. “But this year, everybody knows that that’s the thing to do, which bothers me a little because the majority are seldom right in total. They can move markets for a while, but I am concerned that everybody out there is going to store for higher prices. Whether we can get those higher prices like we did last year or not, I don’t know.”
Amidst the lack of farmer selling and dearth of news, corn and soybean prices traded in a narrow range this week. December corn ended 2 ½ cents higher on the week at $3.82 ¼/bu., and November soybeans were 11¾ cents lower at $8.83¾/bu. Chicago wheat, meanwhile, rallied 31½ cents to finish the week at $5.22/bu., amidst production concerns in Australia and the Black Sea region.
Listen to his full comments here:
For U.S. corn and soybean farmers concerned with marketing recently harvested fall crops, Gulke said, many remained focused on potential rallies that could be sparked by weather issues in South America.
“If we get into a dry spell in Brazil that’s worse than what we’ve had, I can’t help but believe that some of the reason we’re at $8.82, or in that area, and not at $8 would be concern for South American beans,” Gulke said. “If that gets worse, then you could put a dollar on beans pretty easily.”
Hoping for a major fall rally in the row crops would be a tall order given the current supply situation in the U.S., Gulke added, stressing that South America will be the wild card in corn and soybean prices in the 30 to 60 days.
Selling some now and holding some later, he said, will help farmers mitigate risk.
“We need to remain flexible,” he said. “That’s why I kind of like to hold some in my bin.”