After trending lower for several weeks, the grain markets have rebounded—at least for now.
December corn prices were up nearly 16¢ for the week ending July 8, while November soybean prices were up 1¢. All wheat prices were up 30¢ to 45¢ or more.
So, did the markets find their bottom?
“I think there are people out there that believe that is the case,” says Jerry Gulke, president of Gulke Group. “The markets continue to recover from losses earlier this week from support levels and extreme oversold conditions. The rallies are significant, but paltry in comparison to where we were a few weeks ago.”
This shift in market direction could mean prices got low enough to attract new demand or demand has been reduced. Or, Gulke says, the markets could have done a “dead cat bounce,” which means prices are temporarily recovering after a sharp fall.
“You look at how high the market will go before it stops,” he says. “There’s an old saying that 50% of the time you’ll gain back 50% of the losses. Now is a very difficult time to know what truth is, and we just have let some time pass to know.”
On Tuesday, July 12, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.
Gulke says what we don’t want to see is for USDA to lower demand for corn or soybeans and also raise stocks.
“Then we have a problem because the weather is certainly not bullish with the rains that we got across the country,” he says. “It’s not so much what the reports say but how the markets react. We want the market to keep going higher next week.”
Last week Gulke grove through northern Illinois, Iowa, Minnesota, South Dakota and North Dakota.
“I saw some North Dakota corn that look nearly as good as mine did in northern Illinois,” he says. “Some of the soybeans look like they doubled in size in the last seven days or so. Overall, the crop looks better than I anticipated they would be. I’m not so sure we won’t see more corn and more soybeans in the end when they resurvey the Northern Plains.”
Last chance!! Gulke Group 2022 Summer Conference: The conference is set for July 14-15, in Lombard, Ill., at the Embassy Suites. Guest presenters will include William Wilson from NDSU, Glen Buckley of NPK Fertilizer Advisory Service, Drew Lerner from Worldwide Weather, Roger Wallace (livestock economic outlook), Michael Drury of McVean on domestic and global economy, and Jerry Gulke on marketing strategies.
For more info contact Jamie at 707-365-0601 or info@gulkegroup.com
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.
