Weekend Market Report
Stay updated on grain markets with AgWeb’s Weekend Market Report by Jerry Gulke, president of the Gulke Group.
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.