Could a bumper harvest yield sub$2 corn futures with nodisaster on the horizon to offset a record supply of grain?
That is what some people in the market are predicting. And cornis actuallyselling for mid $2 a bushel in places like Kansas, where wheat competes as a feed grain,according to Jerry Gulke, president of the Gulke Group in Chicago.
"I do not like what I hear from some people in the business that it takes a $2 futures market. I hardly believe that, but it's altogether possible if our crop is anywhere close to what USDA thinks," cautioned Gulke, speaking to Pam Fretwell on Farm Journal Radio.
On Aug. 26, Pro Farmer Crop Tour released a corn yield estimate of 170.2 bushels per acre, below USDA 's earlierestimate of 175.1 bushels per acre, and a soybean yield estimate of 49.3 bushels per acre, more than USDA's estimate of 48.9 bushels per acre.
But by either estimate, "we've gottoo much of everything," observed Gulke. "... Now, they've got piles of wheat and piles of corn, so it's like we're chasing each other downwards to see what the lowest prices we can achieve to where we can get rid of the stuff."
The market could slide downward without a wholesale disaster to bring yields down below 168 to166 bu. per acre in corn and around 46 bu. per acre in beans, he noted.
"Markets will seek a level that says, 'How do I get rid of 2 billion bushels of corn and 300 million or 400 million bushels of beans or at least half of that to get to equilibrium again,'" Gulke explained.