The market has discounted South American crops and turned its attention to March 31 and beyond, says Jerry Gulke of the Gulke Group.
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All eyes are locked on USDA’s Planting Intentions report due for publication on March 31 as well as on the U.S. weather outlook in grain-growing regions, says Jerry Gulke, president of the Gulke Group. The storyline is different from last year, when everyone seemed to be focused on wet conditions in South America.
“It’s kind of a foregone conclusion that though the Brazilian crop isn’t done yet in corn—we could still get hot and dry with that crop—but for the most part, this is not like last year,” Gulke tells “Weekend Market Report” host Pam Fretwell in an episode airing Saturday, March 18, 2017. “We don’t have the disaster in South America to contend with. … Although South America has been an important item, now that that’s been discounted, maybe perhaps the market’s starting to look toward the future in planted acres and weather in the U.S.”
It’s also important to keep in mind that the U.S. is a “big fish in a big pond when it comes to corn and soybeans,” Gulke says.
“We get all enamored by 350 million more bushels of soybeans being produced in South America. Well, we could lose 350 million bushels due to weather in this country pretty easily if we’re going to plant 90 million acres, 2 bushels an acre is 180 million bushels,” Gulke says. “Are we going to grow 52 (bu. per acre) again this year as an average? Or is it going to be 46? That’s about 125 million bushels less than last year, even at 94 million acres. … Planted acres will be important if we increase the acreage significantly, but when it’s all said and done, growing weather is still key, even on expanded acres.”