Jerry Gulke: Will Grain Prices Follow Seasonal Patterns into Harvest?
The grain markets were mixed this week, with December corn prices up a penny and November soybeans down 41¢ for the week ending Sept. 2. Wheat prices were down 4¢ to 20¢, depending on the contract.
Over the years traders have used seasonal tendencies of prices of agricultural commodities to help determine risk or reward. It is ironic to look at the last decade or to see how price tops have occurred similar to what seasonal tendency would suggest. I use it as a guide and readers of this column will recall price charts that showed the significance of June 15 tops.
Historical tendencies are not perfect as occasionally times and fundamentals as well as politics can distort the norm. That is when traders, producers and media analysts can get crossways in the markets. This is such a year where getting crossways happened to global traders early in the year when they couldn’t get access to the physical commodity wheat and prices rose hyperbolically and a “get-me-out” mentality took wheat to heights that some thought was just beginning until sell signals were generated and wheat lost all its 2022 value the war caused.
The sell signal around June 21 pre-empted the massive collapse catching bulls like a deer in the headlights.
The 15-year seasonal tendency for soybeans has some interesting aspects. Note only was June 15 important, so is Sept. 1. June put in the top then a collapse before a rally after July 15 to where we are now. Seasonal suggests a retreat of prices for a harvest low in early October. I have suggested in Top Producer there are high odds harvest lows were made in July yet seasonal suggest otherwise.
The market will tell us next week, but the USDA will make a further statement on Sept. 12. The consequences could be huge as if/when a commodity has a counter-seasonal move, meaning rallying in September not retreating, it is a big deal. The market gave a hint on Friday but stay tuned for first two weeks of September.
We’re In Critical Times
Last week I mentioned price charts will be available again at harvest. In the meantime, we offer to try our daily comments at Gulke Group for 30 days; if you don’t like it, we return the money. We offer consulting, advisory and order execution for producers and end users in an exact format to buy, sell or hold for futures and cash marketing regarding grains, livestock, oilseeds and U.S./global economic issues that influence prices as well as decades of successful farming issue.
We live in an economy as farmers where marketing is global and often overshadows majoring in minors regarding a bushel here or there in national yield or a million acres more or less in plantings. Information abounds in media form via email and social media.
These are critical times changing weekly if not daily at times; time is of essence. We offer a different approach as producers and advisors and don’t recommend what we don’t do for ourselves; we have skin in the game.
Contact Jamie at 707-365-0601 or click info@jerrygulke.com and we will respond.
Check the latest market prices in AgWeb's Commodity Markets Center.
Jerry Gulke farms in Illinois and North Dakota. He is president of Gulke Group Advisory Services. Disclaimer: There is substantial risk of loss in trading futures or options, and each investor and trader must consider whether this is a suitable investment. There is no guarantee the advice we give will result in profitable trades. Past performance is not indicative of future results.
