March offers a big lineup of USDA reports. Each will offer key insights to big market questions:
- Crop Production and World Agricultural Supply and Demand Estimates (March 9): How is the South American crop shaping up?
- Hogs and Pigs (March 25): Do we have more or less hogs eating corn?
- Grain Stocks (March 31): How much grain have we used in the last three months?
- Prospective Plantings (March 31): How much grain is in the works for 2021 and will it be enough?
With so many factors at play, the markets continue to experience volatility, says Jerry Gulke, president of the Gulke Group. Price swings of 20¢ are now common.
May corn prices were basically flat down 0.75¢ and May soybean prices were up 27¢ for the week ending March 5. March wheat prices were down 6¢.
“As a result of the volatility, complacency sits in,” Gulke says. “You think soybeans are down 20¢, but then tomorrow they’ll be up 20¢ again. We’ve been here before, but it’s been a while since we’ve had so much volatility with high prices.”
For next week’s reports, Gulke says USDA won’t alter U.S. numbers much. The focus will be on South American crops.
“If the Brazilian crop grows and it is later getting harvest, they will be exporting it longer and not be done by August like normal,” he says. “So that could be a nemesis in our side going into the fall.”
Later in the month will be the Hogs and Pigs report.
“We’re hearing piglets are hard to come by and there are a lot of empty barns out there,” Gulke says. “Producers are wondering how they are going to keep paying $5.50 corn. What the government tells us with the Hogs and Pigs report will be a clue as to what they will tell us the end of the month with the Grain Stocks report.”
From an acreage standpoint, Gulke says, many firms are calling for large numbers of both corn and soybean acres.
“Just a 1-million-acre swing will be a big deal this year,” he says. “Around 1 million acre of corn is about 180 million bushels. That’s a big number. I think acres this year will be a bigger deal than normal. We have big numbers and big concerns.”
Read More
Jerry Gulke: Price Volatility Spreads to All Markets
Jerry Gulke: A Lifetime of Experiences in One Year
Jerry Gulke: USDA’s Supply-And-Demand Dilemma
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Jerry Gulke farms in Illinois and North Dakota. He is president of Gulke Group. 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.
