While states such as Iowa still have young crops in the ground, particularly on the soybean side, all signs point to strong crop production in 2013, says Jerry Gulke, president of The Gulke Group. Assuming that’s true, it will present a demand challenge.
"The government’s saying, ‘Well, we think we can increase demand 1.8 billion (bushels) from last year.’ I think that’s a tall order because I don’t know if there demand is come back that quick in corn especially."
Meanwhile this week, the old-crop corn basis dropped $1 in some places.
"What we’ve heard people saying is that they bought more corn in a week this week than they bought in maybe a month previously," Gulke says. " So I think farmers had corn that we didn’t know we had, and even some beans, and the whole thing just kind of fell apart."
Listen to the Weekend Market Update interview with Gulke to hear more about the Iowa soybean situation, corn demand and how China is influencing the markets: