Weekend Market Report
Stay updated on grain markets with AgWeb’s Weekend Market Report by Jerry Gulke, president of the Gulke Group.
Jerry Gulke, president of the Gulke Group, says new crop corn and soybean charts are signaling the September WASDE might be bearish and confirm the large crop size.
Pro Farmer confirms record soybean crop and bumper corn crop. What does that mean for the harvest and post-harvest outlook for the market?
A lackluster WASDE report had the same effect on the markets this week. Jerry Gulke, president of the Gulke Group, doesn’t think there’s going to be a whole lot of change in acreage in USDA’s report at the end of June.
“It’s like farmers threw in the towel after getting sick of waiting for better prices or realized they’re going to need bin space,” says Jerry Gulke. He shares four points that might mean lower prices aren’t over yet.
Gulke says, all of the winter predictions for the grain and oilseed market haven’t come true. “So suddenly we’ve kind of turned upside down to where conventional wisdom was almost 98% wrong.,” he says.
Jerry Gulke, president of the Gulke Group, says in the report USDA finally rectified the old crop corn carryover figure trimming it by 100 million bushels with an increase in demand.
Corn, soybean and soybean meal futures posted higher weekly closes, but it’s hard to predict how far the grain markets could rally, says Jerry Gulke. “Now it becomes more of an art than a science,” he adds.
Gulke Group president Jerry Gulke explains why he made the last-minute decision to switch 200 acres of corn to soybeans.
Despite being lower for the week, the grain markets all closed higher on Friday and might have been putting in risk premium says Jerry Gulke, president of the Gulke Group.
Commodity and financial markets saw another volatile week. What’s triggering it? Jerry Gulke, president of the Gulke Group points to a couple possible clues.
Markets get overextended and need to equalize, says Jerry Gulke, president of The Gulke Group. “The stock market got too high and is correcting, and grains got too low and might be in the same process,” he explains.
Jerry Gulke, president of The Gulke Group, says even though the quarterly stocks number for corn came in below the trade guess, he thinks it is more bullish than it looks on the surface due to hidden corn disappearance.
Jerry Gulke says he’d like to see another higher weekly close next week to help confirm the bottom is in the soybean market as well as a close above $12. A higher monthly close would be even more convincing.
Gulke has heard the argument that the funds hold a near-record short position in the grain and oilseed complex and will eventually need to exit those positions. However, he says it’s not that simple.
Jerry Gulke, president of the Gulke Group, spoke to a full house at Top Producer Summit this past week. “Producers are finally interested in marketing now that prices have fallen further,” he says.
Shipping disruptions and higher freight costs are to blame for the basis collapse and the large carries in all the major grains, says Jerry Gulke.
“I don’t think we are going to see huge losses in prices from here forward, but these are not exciting prices,” says Jerry Gulke, president of the Gulke Group.
Jerry Gulke, president of the Gulke Group, considers the bounce off the lows a victory: “This was a win, even though we had markets down a little bit for the week.”
Prices are holding within trading ranges due to the lack of farmer selling and Brazil production concerns.
The world stocks to use ratios were not raised in the December WASDE, which was a victory for the market.
The focus of the soybean market continues to be South American weather and crop expectations. Jerry Gulke says whether or not forecasted rains occur will set the direction for the market into next week and beyond.
On soybeans, Jerry Gulke says the 25 million bushel increase in carryout can easily be wiped out with the current weather issues potential cuts to South American production, plus increased export demand.
The strong close in soybeans reflects concerns about South American weather. If South American production drops 100 million bushels that makes U.S. ending stocks at 220 million bushels look tight, says Jerry Gulke.
This week’s price action in soybeans and soybean meal has many wondering if a South American weather market is starting early. Even China is taking notice.
The real question is: Should farmers wait for a more significant rally? Jerry Gulke says look at the carry in the market because it narrowed this week and determine if you can afford to pay commercial storage.
Jerry Gulke says the Middle East conflict bears watching and advises farmers to have their energy and fertilizer supplies in hand should the event turn into another war.
Should farmers store and try to capture the carry and more importantly will that carry be there in the future when it’s time for them to deliver? Jerry Gulke, president of the Gulke Group, is skeptical.
Jerry Gulke, president of the Gulke Group, says the most significant part of the report was the breakdown of who is holding the grain.
The corn market is turning stronger, says Jerry Gulke, while wheat was the first to reset and proceed like everything is normal, even though that’s not the case. When it comes to soybeans, there’s bad news and good news.
On the heels of the September WASDE report, Jerry Gulke details 9 points to help you understand and navigate the troubled waters ahead.