There were no big surprises in today’s report other than maybe USDA dropped corn yields a tad more than some expected, says Jerry Gulke of the Gulke Group. "We bought October put options ahead of the report just in case the trade was too bullish. It looks like we won’t need that protection, but we’ll see when the day is over."
Gulke expects corn yield to ultimately drop to 161 bu. "That will drop carry-over below 1 billion bushels—really rather unacceptable given demand. Today’s export sales number wasn’t great for corn, but demand is still substantial."
With the prices available, some want to take a second look at selling out of the field, though basis is terrible in many areas and should improve, he adds.
Soybeans are making a blockbuster crop and yields could rise from today’s 44.5 bu. to 45 bu. by the time harvest is over, Gulke believes. "My fields have extra growth on beans and those new pods are actually filling. Even with strong exports and more Chinese buying, carry-over will be 300 million or more. So barring problems in
USDA's wheat export estimate could be on the low side, Gulke says, "but carryover is 850 million bushels and everyone knows there will be lots of wheat coming in 2011."