Wheat prices were the winner this week in the grain markets. March corn prices were up 6.5¢, and March soybean prices were up 3¢ for the week ending Jan. 27. Wheat prices were up 8¢ to 20¢, depending on the contract.
Meanwhile, natural gas, heating oil and crude oil have all been in a downward price trend.
“It’s been a quiet week except for wheat,” says Jerry Gulke, president of Gulke Group. “Wheat has some promise, but we’ll have to see what happens in Ukraine and also with the weather. Sometimes wheat prices will give you a signal of what it to come.”
The latest news with the Russia-Ukraine war is at play with wheat prices, he says. Primarily at play is the move by Germany and the U.S. to supply Ukraine with battle tanks — even if the tanks won’t be immediately available.
“We’ve got this ongoing global political agenda impacting our markets,” Gulke says.
As for corn and soybeans, Gulke says the Jan. 12 report has muted major moves. Plus, rain in South America, Argentina in particular, has helped size up the current supply.
“We’ve probably locked in the highest we’re going to pay for old-crop soybeans, subject to some basis plays,” he says.
Technically Speaking by Jerry Gulke
A lot of information has crossed over the desks of analysts and still the most often comment I hear is to “put a floor under prices”. But the cost to do so is nearly prohibitive — just check out the cost of an at the money put option for soybeans, corn or even wheat.
The next idea I’ve heard is to buy a put and sell a call against it to finance the cost. That is like betting double you are right. Another strategy is to sell a put and a call both as prices are likely to continue to stay in a somewhat sideways trading range.
My personal opinion is that such strategies are meant to collect trading commissions and reflect the unknown market outlook in our industry that seems to flow at will. Buying a put or call option that has any worth is very expensive. Anything affordable is worthless.
If in need of some guidance now prices of new crop corn and soybeans have fallen to levels likely unthinkable by most, give us a call at Gulke Group 707-365-0601, or email info@gulkegroup.com leave info and we’ll call you back or email you. There is no free trial, but we’ll give you your money back in 30 days if not satisfied.
Read More
Jerry Gulke: Do the Negatives Outweigh the Positives in Grain Price Outlook?
Jerry Gulke: Did the USDA Reports Create A New Paradigm Shift in Grain Prices?
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 Advisory Services.
Learn more at GulkeGroup.com
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