It was a somewhat sleepy week for markets with modest moves in corn and wheat, but soybeans rallied for the second week in a row, albeit a sparse 9¢ higher but a move in the right direction. Jerry Gulke, president of the Gulke Group, says Brazil’s continued weather concerns is working in our favor for now but with Argentina’s crop doing well South America’s situation could quickly change.
“It [Brazil’s potential crop yields] is going down, it’s going in the right direction,” Gulke says.
There is a global glut of soybeans right now but it’s not the only challenge the markets are facing. The question of how many U.S. soybeans China will buy and what they do with those beans remains up in the air. Despite these challenges and a plethora of unknowns right now, soybeans saw one of their highest closes in 2019 this week.
“There’s a lot of questions out there unanswered, but when you close into new highs for even this short year, it’s pretty significant,” he says. Now the market needs to sustain this new level.
Complicating this matter is the government shutdown. The past month, traders were relying on different outlets for market, trade and export information because USDA reports are delayed. As of Friday, Jan. 25, the president announced a deal that will reopen government agencies through Feb. 15. This will ensure furloughed workers will receive backpay, but will it also provide a backlog of USDA reports that shocks the marketplace? The first of which will be a "catch-up" report Feb. 8, coincidentally the last day of Gulke Group's annual outlook conference in Palm Springs, Calif.
“The charts are going to be interesting next week because of the events of this week,” Gulke says.
Listen to Jerry Gulke’s full commentary on this week’s Weekend Market Report.
Read Jerry’s most resent Technically Speaking column, Information Overload—Not!
Read and listen to all of Jerry’s commentary by visiting AgWeb.com/Gulke.