Jerry Gulke: Are Ag Commodities Due for a Reset?
The grain markets were mixed this week. Corn prices were up about 10¢, for the week ending June 17, while soybean prices were down 30¢ to 40¢. All wheat prices were down from 35¢ to 50¢ for the week.
The big economic news of the week was from the Federal Reserve. For the first time in three decades, it raised its key interest rate by 75-basis points. This move is also a sign of additional rate increases to come.
“Federal Reserve Chairman Jerome Powell said afterward they want to see inflation back down around 2%,” says Jerry Gulke, president of the Gulke Group. “That implies it may take some pressure because we're at almost 9% now.”
The stock market rallied that the Fed did do what they said they would do, Gulke says. But the next day the gains evaporated and closed lower for the week.
With grain markets still at high levels, Gulke says you have to ask if the market is reflecting reality or if it sees something coming in the future.
“I'm always concerned about looking over my shoulder and thinking about what black swan am I not seeing?” he says.
High Temperatures and Wheat Harvest
Record-breaking heat spread across the South and Midwest this week. While the high temperatures can be hard on growing crops, they do create an open window for wheat harvest. This is one of the reasons wheat prices were lower this week, Gulke says.
In northern Illinoi, Gulke was lucky enough to catch a rain this week. His corn crop is looking great.
“Now, if we have this heat stay with us for two weeks or more, we’ll have a problem,” he says. “I remember in 1988, it stopped raining on June 21 and didn't rain again and we went to 100 degrees and that destroyed the crops. There’s a lot of that apprehension out there about that.”
Listen in as Gulke also discusses the latest situation with Ukraine, the Bitcoin collapse and more:
Check the latest market prices in AgWeb's Commodity Markets Center.
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.
