The reactions to USDA’s World Agricultural Supply and Demand Estimates (WASDE) report were not as one would expect. Thursday saw a neutral response to a bullish corn report that lowered carryout by 125 million bushels and USDA increased soybean carryout by 60 million bushels taking us to levels of ending stocks not seen in quite a few years.
Jerry Gulke, president of the Gulke Group says, “Even though I expected that I was surprised the government would make such big moves.”
Looking ahead at the global demand in corn, typically, when production goes up the demand goes up; however, this is the first year in a while the global demand for corn will exceed the stocks globally. Conversely, we’re also seeing soybean supplies greater than the demand. Gulke notes it’s not significant enough to impact the market at this point but it does signify a shift in the balance, which could be positive for corn prices and negative for soybeans but it may be too soon to tell. While hope springs eternal, no one is willing to take any risks with such tight margins right now.
Listen to Jerry Gulke’s full commentary on this week’s Weekend Market Report with host Pam Fretwell.