Both the corn and soybean markets had a ho-hum week. For the week ending Nov. 16, 2018, corn prices were around a nickel lower, while July soybeans were up nearly 4¢ and November soybeans were unchanged.
The final stretch of corn and soybean harvest is dragging on across farm country. As of Nov. 11, 84% of the U.S. corn crop has been harvested, which is slightly behind the five-year average of 87%. Of the 18 major corn-growing states, Michigan, North Dakota, Pennsylvania, South Dakota and Wisconsin are below 75% harvested.
For soybeans, 88% of the crop has been harvested, which compares to a five-year average of 93% harvested by mid-November. Of the top 18 soybean-growing states, Kansas, Kentucky, Missouri, North Carolina and Tennessee are below 75% harvested.
Around 10 million acres each of corn and soybeans that are left to be harvested, says Jerry Gulke, president of the Gulke Group. He puts that in perspective with the estimated 1 billion bushels of soybean ending stocks.
“If you lose 5 bu. per acre on the 10 million acres left out there, that’s 50 million bushels,” he says. “That just takes your carryout down to 950 billion.”
If the yield for corn on the remaining 10 million acres dropped by 10 bushels per acre, that adds up to a bigger difference, Gulke says, but it’s still not enough to dramatically boost corn prices.
“Go back five years ago, this would have meant a lot more when we had a carryover of 250 to 300 million bushels of beans and China was in our market,” he says. “That would have taken the carryout down to unacceptable levels. It’s disappointing to have what would otherwise have been supportive news and still not get a real extended move in the markets.”
The lift in the soybean market this week was mostly due to recent comments by President Trump.
“Last night he mentioned that any deal with China has to include some deal with soybeans and he wants China to agree to buy as many beans as it did before the tariffs,” Gulke says. “But then today, he put out another announcement that China wants to make a deal, but it will hurt China more if they don’t make a deal than it will the U.S.”
Gulke says the Friday announcement took soybean prices from 7¢ lower to 7¢ higher in a matter of minutes and settled up 3¢.
“So, there's a point where you could just stop the rhetoric,” Gulke says. “We’ll probably make some sort of deal by the end of the month. But I hope it’s not a ‘buy the rumor and sell the fact,’ because we'd better see something concrete come out of this. The longer you wait, the harder it is because China continues to buy soybeans from alternative sources.
The rest of November should be exciting and bring some market-moving news, Gulke adds.
“We'll see you at the end of November whether we really have anything to be thankful for,” he says.
Listen to the audio report as Gulke shares his decision on his grain in open commercial storage. He will further discuss this topic in his in-depth marketing commentary, Technically Speaking, next week. You can find it, as well as all of his audio commentary, at AgWeb.com/Gulke.
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