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Trader says sustained corn rally is possible

Corn is trading higher again today and one analyst thinks this could be the start of a sustained market rally.

Commodity trader Jerry Gulke with the Gulke Group tells Brownfield the decline in corn acres has not received as much attention as it deserves.

“Not many people talk about this, but the reduction from 94 million last year in planted acres to 90 million means we’re going to produce—even at the 170.7 (b/a) I think the USDA said—we’re still going to produce 900 million bushels less than last year,” Gulke says.

Considering the planting challenges this spring, Gulke says that corn acreage number could drop as low as 88 million acres. And he says corn replant will also be a factor.

“We’ve got a lot of clients in Indiana, Ohio and Illinois that have said, ‘We’re debating whether we should keep 18 to 22 thousand population or whether we should replant or not’,” Gulke says. “I just had a client from northwest Iowa say he’s going to replant 350 acres. I didn’t think that was going on in Iowa, because when you look at the progress reports, everybody’s done.”

Gulke spoke Wednesday at the Nebraska Cattlemen’s midyear meeting in West Point, Nebraska.

AUDIO: Jerry Gulke