May corn prices were up 6.5¢ and May soybean prices were up 25¢ for the week ending Feb. 26. March wheat prices were up 3.5¢.
On the flipside and beyond the traditional commodities, March Bitcoin was down $9,200 for the week, April gold prices were down nearly $50 for the week. The Nasdaq and the Dow were also lower for the week.
“We live in volatility as agricultural producers,” says Jerry Gulke, president of the Gulke Group. “We’ll see a 70¢ swing in beans in 36 hours. That’s a big gross income switch. So, it’s kind of unusual for the stock market people have people to witness it but now it’s happening there as well.”
Gulke says he was surprised gold prices were down $50, in spite of the talk of some inflation.
“There is talk now that Bitcoin is the new gold in other words, it is going to be the speculative area that says if U.S. currency gets weak, we’ll go to Bitcoin,” he says. “There’s a lot of risk in Bitcoin. It took a big hit while the dollar when higher and gold went lower.”
In the commodity markets, Gulke says, the focus is on South America. Harvest is slower than normal, so ships are waiting to be loaded. This is causing weaker basis prices.
“Looking forward for the rest of the summer, they are the competitor,” he says. “They will be lower priced than us. There’s always the caveat that once South American soybeans and meal gets cheaper, we run the risk of seeing beans shipped into the U.S. because of our tight supply situation. We have to keep an eye on that.”
Even though harvest is delayed due to weather issues, Gulke says, farmers should not downplay the size of the South American crop.
“I think the trade has underestimated the size of the acres being planted,” he says. “That may be much higher than what anyone anticipated. High prices encourage production of just about any piece of ground—here and in South America.”
The delayed harvest will also mean harvest lasts longer than normal, which could impact U.S. prices.
“That means South America may become a bigger competitor longer than what would be normal,” he says.
Technically Speaking by Jerry Gulke
I’ve spoken briefly about the new focus on a biodiesel blend that is favored and subsidized heavily in California for a cleaner burning biodiesel blend. That focus has had an influence on soy oil as well as concerns globally of adequate edible oils, including soy and palm oils as well as a number of other minor oils.
To get a perspective, a long-term soy oil charts is shown below along with a 40-year rapeseed chart (Canola). Rapeseed recently posted new lifetime high prices. Have we entered a new global situation concerning the food supply chain and building strategic reserves all affected by the new “green” focus? Palm oil (chart not shown), the global majority source for edible oil, has doubled in the past year.
Read More
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Find more written and audio commentary from Gulke at AgWeb.com/Gulke
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. 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.
