The corn market continues its ascent. December corn was up nearly 22¢ for the week ending May 24. That follows last week when December corn climbed 25¢ for the week.
November soybeans also finished the week on a high note at 8¢ higher for the week, while July wheat jumped 25¢.
“This was really exciting for farmers who got some of their equity back,” says Jerry Gulke, president of the Gulke Group.
The markets continue to be led by the weather. The planting pace for corn and soybeans is dramatically behind average. As of May 19, just under half of the U.S. corn crop is planted, which compares to a five-year average of 80% for this time period. This year’s corn planting pace is the slowest since 1995.
For soybeans, the planting pace is equally slow. As of May 19, 19% of the U.S. soybean crop is in the ground. The five-year average for May 19 is 47% planted.
“Most weather markets will go from four to six weeks,” Gulke says. “And we probably started this weather market about two to three weeks ago, which is about 10 to 15 trading days. So, we’ve had a 50¢ move in about 10 trading days.”
It’s interesting to note, Gulke says, that corn is up almost three times the amount of beans is up.
“So, you can kind of tell that the traders are thinking we may not have as much corn as we need so farmers will probably plant more soybeans,” he says. “But, with the lack of Chinese buying, prices don’t need to go as high.”
This weather market could last two to three more weeks, if farmers are lucky, Gulke says.
“That puts us into the first two weeks of June,” he says. “After June 10, it probably matters not anymore because we’ll forced to make decisions that are more due to climate and weather than economics. We’ll truly run out of time. That’s probably when we exhaust the upside.”
These dramatic market swings highlight why flexibility is important for grain marketing, Gulke says.
“You just can't be complacent in these kinds of markets, especially when government is kind of running the show and Mother Nature is on their side this time,” he says.
Gulke discusses President Donald Trump’s latest farmer aid program, marketing strategies and more.
Find previous audio and written reports with Jerry Gulke at agweb.com/Gulke
Jerry Gulke: Government Intervention Back In Vogue
Jerry Gulke: Has Reality Turned Into Fear?
Are the Grain Markets Facing Reality?
Grain Markets: The Calm Before the Storm
Jerry Gulke: Trade Deal or No Deal?
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