For the week March corn lost 21 cents, March soybeans fell 4 ¾, March soybean meal plunged $13.70, March soybean oil soared 292 points, March soft red winter wheat gained ¾, March hard red winter wheat lost 3 and March hard red spring wheat fell 2.
Grain markets were mostly lower for the week with corn taking the brunt of the selling pressure in reaction to USDA’s bearish January reports. The agency raised corn yield by .5 bu. per acre to 186.5 bu. and raised harvested acres by 1.3 million, which led to a record 17 billion-bu. crop. This was a disappointment and even a shock for many farmers who were convinced the yield would be cut.
What Did We Learn From The USDA Report?
Jerry Gulke, president of The Gulke Group, says the report provided some valuable lessons about marketing. “You just can’t look in your backyard and think, what’s going on there is the same everywhere.We had clients in Nebraska that would have bet the farm that the yield was going to be closer to 181 or 182 rather than 186 bu.If they bet the farm they lost,” he says.
Where Did the 1.3 Million Harvested Corn Acres Come From?
Gulke says USDA added insult to injury by raising harvested acres another 1.3 million to a final 91.3 million acre. The Gulke Group does an acreage survey every spring and he says in 2025 it showed over 100 million acres of corn would be planted by farmers.“And I said, I can’t print that, you know, I’ll be the laughingstock of the media. Well, we finally printed 98.2 million and people thought we were nuts. Well, it took this long to get there.”So based on their survey work he was not surprised with USDA’s print because there was a massive move to corn.“I don’t care if you were a 250-acre farmer or a 10,000-acre farmer, they were all doing that.”
He says this was the first time in his career he’s seen that big of a trend shift, but it was forced by the crop insurance guarantee. “If you had full coverage on corn, you probably wouldn’t lose much so that has an influence. So, suddenly, we’re not taking our cues from the marketplace, we’re being manipulated by the media or by the president himself, perhaps. ”However, he says for soybeans insured at 85% of the price it takes a long time for the insurance to kick in.So, he thinks it will be hard to get acres to shift out of corn again in 2026.
Gulke says they thought USDA could raise harvested acres in the final production report based on the methodology and it made sense to him with an eight million acre increase in planted acres over last year. He explains, “There are always unharvested acres due to wind, hail and the like and the rest of it is cut for silage for use in dairies and other livestock operations.” Plus, the amount of corn cut for silage didn’t change much from last year so that extra corn was harvested as grain.
Farmers Upset with the USDA Report
Gulke heard from many clients after the report that were upset with USDA. “I mean, there were a lot of farmers that thought there was scheming going on by USDA before the report, but there’s a lot more suspecting it now. They say it proves all USDA wants is cheap food.”
While farmers can argue the credibility of USDA’s data and the models they use, he stresses that the agency doesn’t manufacture the numbers. He recommends producers really read the WASDE report. “You can go through the tables, and it shows what states had what, but then you get to the protocol. In other words, here they write about how they made their decisions and how the data came about.” He says only then can you argue the rationale behind it.
Report Indicates Farmers Storing More Grain
According to Gulke many farmers were surprised by the report because they were long in the market, as more stored grain this fall on the farm to for a rally. “You know, if the crop really wasn’t there, there was an awful lot of it stored on farms. There was 15% more grain stored on farm than last year.”Plus, Gulke also questioned if the corn supply was so tight why wasn’t his basis narrower? “ Prior to that report, my basis in northern Illinois was worse than when I harvested the grain.”
Gulke says he offered various marketing strategies this fall. “We talked about whether or not to store grain, or to sell it and buy a call.”He says for farmers that paid 30 to 40 cents to commercially store corn and wait for a rally, that corn is worth the same or less now than it was when it was harvested. According to Gulke, a loss of 25 cents on corn equals $50 an acre.So, for a farmer that was storing 2 million bu. that’s $500,000 of lost income.“It’s a lesson to be learned. I’ve seen it before. It’s just too bad that it didn’t go the way that everybody wanted to. Now we’ve got a problem,” he adds.
So, what should farmers learn from the report? Gulke says, “That you really have to think out of the box a little bit when it comes to your marketing or be prepared for a shock and there are marketing tools to help protect against that loss.”
For more information contact Jerry at info@gulkegroup.com.
