Markets Favored End Users This Week

October 1, 2010 12:02 PM
 

 While this week’s strongly lower closes for soybeans, corn and wheat were bad news for producers who hadn’t protected themselves against such a move, they surely won’t hurt demand, says Jerry Gulke of the Gulke Group.

"The market typically offers both producers and users several opportunity to price and this was just one of the switches from one to the other," he says. It was caused partly by analysts putting their pencil to the implications of the stock report, which was "pretty serious" in his view, and the desire going into next Friday’s Production and Supply/Demand reports not to get blindsided if USDA doesn’t lower yields sufficiently. "There are still a lot of long speculators who aren’t going to like getting margin calls on Monday, so we could see further weakness," cautions Gulke. 

Friday, Informa announced it expects USDA to use a 160-161 bu. yield next week, dropping to 158.5 by the final report in January. "It could be a surprise in the form of a low yield would put the bottom in this market," says Gulke. "Otherwise, we may wait until January’s reports." 
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