The grain markets this past week had trading ranges typical of a daily range a few months past. They appear to be calming down ahead of USDA’s February reports and USDA’s Ag Outlook Forum, says Jerry Gulke, president of Gulke Group.
March corn prices were down 5.5¢, with December corn prices up 8.5¢, and March soybean prices were up 22.5¢ for the week ending Feb. 3, with new-crop soybeans up nearly 19¢. Wheat prices were up 4¢ to 12¢, depending on the contract.
“It looks like the grain market volatility is starting to slow,” Gulke says. “We’re getting to that point in time where we transition from wondering what’s happening in South America to finally knowing the size of the crop.”
In addition, Gulke says, February is normally a transition period, with crop insurance guarantees on the horizon.
“Right now, the insurance levels for corn won’t be near what they were last year, so there’s a lot of wondering going on about acres,” he says.
USDA Reports on the Horizon
On Feb. 8, USDA will release its monthly World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports. Then USDA will hold its annual Agricultural Outlook Forum on Feb. 23-24.
“We finally had a very good weekly export sales report for corn, but it didn’t move prices higher,” Gulke says. “USDA has been lowering exports every month for months, so the bad news would be if they continue to lower exports on corn. That would be an indication of what the Ag Outlook Forum report will say later this month.”
This week USDA released the cattle inventory report showing the Jan. 1, 2023, total beef cow inventory numbers were down 4% year-over-year, coming in at 28.9 million head. Additionally, the total beef cows reached the lowest point in inventory in over 50 years.
With this data, Gulke says, you’ll likely see a drop in feed demand going forward.
“We want to watch for those numbers,” he says. “You just don’t want to see demand going down for any reason.”
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?
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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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