If the upturn in corn and soybeans this week felt familiar—you’re right. Corn and soybean prices reacted exactly like they did one year ago, by moving higher at the end of August. For the week, corn prices closed up about 3 cents, soybeans were down 9 cents and wheat prices were up around 8 cents.
Wheat prices were the leader in posting gains.
“About six weeks ago the trade started talking about problems in Russia and Ukraine,” says Jerry Gulke, president of the Gulke Group. “That wheat rally lasted about 4 weeks (typical of a weather market) and proceeded to back losing nearly 100% of those gains.
Gulke says these movements have cleansed the system.
“Sometimes I say the market gets so irrational that it has to get sick, throw up and start all over again,” he says. “Wheat kind of did that. It really confused the bulls, and we went back to where it all started before the trade knew there was a wheat problem, .” Technically wheat began its positive bias back in late December 2017.
For corn, Gulke says, the expiration of the delayed pricing (DP) contract likely supported prices. When those contracts expire, you sometimes you get a rally, he says.
“Also, there’s still talk out there that the corn crop may not be as good as the government thinks,” Gulke says.
Soybean prices pretty much went along with the other two commodities, Gulke says.
Many areas in the Midwest picked up significant precipitation this week. Here’s the rainfall over the past seven days:
“We still have a lot of rain coming,” says Gulke of his farm in northern Illinois. “We know what happened in Argentina when it just started raining during harvest. We just don’t need any more on these beans.”
With the three-day weekend in honor of Labor Day, Gulke will be watching how the markets open on Tuesday.
“We’re turning some things around,” he says. “If we could open higher, since we closed on the high of the week, that would be good news.”
The other big news item of the week was USDA’s release of its tariff aid plan. Gulke provided in-depth commentary in this week’s Rest of the Story column, “Market Facilitation Program Details”
Read more from Jerry Gulke by visiting AgWeb.com/Gulke.