Corn and soybean prices are both showing some positive moves. For the week ending Oct. 5, corn prices were up about 11 cents and soybean prices up nearly 25 cents.
Slow harvest progress, strong export sales and NAFTA 2.0 all helped fuel the price rallies, says Jerry Gulke, president of the Gulke Group.
On the weather front, farmers in the Midwest have been pelted with excessive rain, especially in Iowa and the eastern Corn Belt. See how much rain has fallen in the last month.
And, the precipitation forecast for the next six to 10 days:
“I don’t think I can walk in my fields, let alone drive in them now,” says Gulke, who farms in Illinois and has farming interest in North Dakota. “For the next 10 days, it looks like we’ll get rain for every other day. Harvest may be a long-drawn-out affair.”
For grain prices, these weather delays came at a good time, he says.
“For the short run, it delays the piles we that were supposed to be insurmountable and helps elevators get rid of some stuff,” Gulke says.
Unfortunately, these delays aren’t helping the wide basis farmers are seeing. Gulke says he’s asked elevator managers when basis will improve, and their response is: when we sign an agreement with China.
Large crops on the horizon combined with large carry-in supplies of corn and soybeans make storage decisions even more complicated and risky for farmers. In his recent Top Producer column, titled “To Store Or Not,” Gulke discussed how on-farm storage should help pay for bins again, but doing so requires expertise, timing and a good sense of market outlook.
“There are two sides to this—on-farm storage and commercial storage,” Gulke says. “For commercial storage, if we have to wait until July to get a carry of about 50 cents for soybeans, it costs me around 68 cents. Right now, I see no economic benefit to storing beans.”
Corn has a better demand story, Gulke says. “We may not increase corn acres as much as we think because it wasn’t as bad of a year as we expected in soybeans, even with the price drop,” he says.
USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on Thursday, Oct. 11.
“We certainly have reason to believe that corn exports and demand for feed could increase a little,” Gulke says. “But we could also see an increase in the carryout for corn and especially soybeans. That would not be a good deal. We also still have a lot of the crops left that need to find a home, and October ends the insurance fall price discovery after which final price protection evaporates."
For more articles and audio commentary from Jerry Gulke, visit AgWeb.com/Gulke.