Even a dead cat will bounce if it falls far enough and fast enough. Following a month-long decline, both corn and soybean prices rallied from their lows to end the week. Corn prices were up about 13 cents for the week and soybean prices were up around 30 cents.
This bounce brings some glimmers of hope for the grain markets, says Jerry Gulke, president of the Gulke Group.
“If you go down $1 or $2, you think you're going to bounce a little bit; that makes sense,” he says. “So, we'll see what happens next week. It could have been worse.”
The crop conditions ratings released on July 16 showed a good-looking corn crop. However, the percent of good and excellent rated corn in the country dropped a few percentage points from the week before. The same was true for the soybean condition rating.
“August weather is the biggest determinant of yield for soybeans,” Gulke says. “And that August weather looks fairly good. Every time you get an inch of rain, that's an inch of rain that's available for to make that crop. I think pretty close to making that corn crop.”
There are some bad spots—that are too wet or too dry, Gulke says. “But overall, there's going to be a lot of 240-bushel or even 300-bushel corn and Illinois,” he says.
Gulke expects the condition ratings will drop a bit more on Monday.
President Donald Trump’s latest political moves and discussions with China continue to grab headlines. In regard to the Chinese tariff situation, Gulke says, something needs to get settled fast.
“The new harvest is coming on quick and we got the old carry over to dispose of yet,” Gulke says. “If China buys a lot less, and it looks like they will, we could be holding the bag for the carryout.
“A lot of people are stunned, that this is a lot more serious for agriculture than we envisioned just three or four weeks ago.”
Gulke will discuss the latest market movers, as well as what insights he gains at next week’s Gulke Group conference in his upcoming “The Rest of the Story” column. Read it as well as previous columns at AgWeb.com/Gulke