For the week, March corn gained 4¼ cents, May corn was 2½ cents higher, March soybeans lost 15 3/4 cents, May soybeans were down 17½ cents, March soybean meal gained $9.10 per short ton and March soybean oil plunged 311 points lower. March soft red winter wheat fell 19¼ cents, March hard red winter wheat fell 12¼ cents and March hard red spring wheat lost 9 cents.
The corn market had another strong week. On Friday, it posted the highest close in six months on a weekly continuation chart, which is impressive considering soybean futures hit new contract lows mid-week — usually a headwind for the corn market.
Jerry Gulke, president of the Gulke Group, says the weekly continuation chart corn is trading above the October high, the 50-day and the 200-day moving average.
“Those areas had served as chart resistance for corn. We’re above $4.40 on March corn and above $4.50 on July corn. For the first time in three years, we’re also trading above the fall highs,” he says.
Gulke says the market is acting differently than it did a year ago as the forward spreads are working.
“Last year there was carry in the markets, meaning the deferred contracts were higher than the nearby contracts signaling farmers to store their grain because the market didn’t need it.”
The corn futures are moving higher at the same time the basis is not collapsing, he adds, which is good news for farmer.
Gulke chalks up the strength in corn to robust underlying demand with cattle being fed to heavier weights and ethanol production posting another record week at 1.103 million barrels per day.
Export commitments are also running nearly 30% ahead of last year for corn and loadings are also pacing ahead of 2023.
“What is remarkable about our export pace is we’re seeing these numbers with China absent from our market,” he says.
However, Gulke says the charts forecast the move well before the fundamentals caught up.
“The chart is telling us to have a little patience. Sell what you need for cash flow purposes and then let the market tell you what to do. Right now, we’re in a paradigm shift in corn we haven’t been used to for the past three years. It looks like an uptrending market,” he says.
When the corn market reaches those higher price levels, Gulke says farmers need to reward the market.
Soybean meal also had an impressive move hitting new contract lows mid-week and then rebounding to close over $9 higher for the week.
The higher weekly reversal, according to Gulke, is possibly confirming a low.
Gulke says the market was reacting to news the European Union will be placing a tariff on or banning the feed additive lysine from China.
Soybean meal is a common replacement for lysine in swine diets, and the news turned the market higher, in addition to value buying by end users as January meal had dropped as low as $283.30 and March as low as $285.10 per short ton.
For more information, contact Jerry at info@gulkegroup.com.
