Corn and soybean prices closed the week on a steady note. For the week ending Nov. 9, corn prices were down about 1¢, while soybean prices were up 1¢ to 3¢, depending on the contract.
This stabilization in prices occurred amidst the monthly edition of USDA’s Crop Production and World Agricultural Supply and Demand Estimates reports. On Thursday, Nov. 8, USDA lowered both the total corn production and national average yield. Currently, corn yields are expected to average 178.9 bushels per acre, down 1.8 bushels from the October forecast.
For soybeans, the national yield and production was also lowered. The current soybean yields estimate is 52.1 bushels per acre, down 1 bushel from last month.
“This would have been a good report, but USDA found that Chinese stocks are nearly double what we thought—nearly 6 billion bushels more,” says Jerry Gulke, president of the Gulke Group. “That’s nearly three times the carryover that we have here.”
This news from China hurt the market, he says. “Corn fell like a rock before it rallied back up.”
For soybeans, the lower national yield would also have been a positive for prices. But, USDA lowered exports by 160 million bushels. “That was kind of a shocker; I thought it would be more gradual than that,” Gulke says.
Basis bids are starting to improve—just slightly.
“I sell my beans in northern Illinois,” Gulke says. “My basis was 93¢ at the start of the week and now it’s at 86¢. But we’re not talking narrowing it from 39¢ to 32¢.”
Regardless, this year proves that n-farm storage pays, he says. “It has paid for the last 30 years.”
Looking forward, Gulke says, market moves will likely be due to news from President Donald Trump. Any tweets or updates (like the one on Nov. 1) about positive moves in trade discussions will likely send prices higher.
“It will be a psychological push, like we had last week,” Gulke says. “We could get another 40¢ or 50¢ if we can continue to get some positive tweets. The market wants to hear some good news.”
In the meantime, Gulke encourages farmers to run several cash flow scenarios for corn and/or soybeans in 2019.
“We’ve got a holding power, but you need to start making plans for different cash flow situations that are going to come whether they make a deal or not,” he says. “There's going to be bills to pay.”
Gulke will return next week with his in-depth market commentary. You can find it, as well as all of his audio commentary, at AgWeb.com/Gulke.