Little Good in September Stocks Reports

02:40AM Oct 01, 2011
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Few positives came out of the Sept. 30 Grain Stocks reports. Old crop corn stocks for Sept. 1 were totaled at 1.13 billion bushels, down 34% from Sept. 1, 2010. As of Sept. 1, old crop soybeans totaled 215 million bushels, up 42% from Sept. 1, 2010. For all wheat, stocks are down 12%, coming in at 2.15 billion bushels on Sept. 1. 

“The report was bearish to very bearish. The longer you analyze it the worse it gets,” says Jerry Gulke, president of the Gulke Group.
Listen to his audio analysis:

He says just a few months ago, the market and media were considering the thought of running out of corn. “Well, it didn’t happen, we have a billion bushels of corn leftover.”
Earlier in September, corn prices were hovering around $7.50. No longer. Corn prices took a hit on Friday, with Dec 2011 corn closing at $5.92
If you’re looking at the national corn production average of 150 bu./acre, you’re talking $300/acre loss, Gulke says.
“We didn’t just lower the gross, we probably just lost half or two-thirds of the net profit.”

The Good Marketing News

Gulke says the one positive to come out of the Sept. 30 reports is the key consumers of grain are still intact. “We certainly saved our factory, the ethanol and livestock. They certainly got a reprieve.”
Prices for both cattle and hogs saw improvement and Gulke says the livestock industry should be ready to eat all the corn that we want to produce next year.

Next Market Mover

Only seven trading days remain before the Oct. 12 USDA Crop Production reports. Gulke says if yields come in lower then, expect some wild market changes.
For More Information
See the grain stocks reports that came out this morning. Stay tuned for report analysis.