For the week December corn was down 4 ¼ cents, January soybeans were 1 ¾ higher, December soybean meal fell $4.50, December bean oil gained 100 points, December soft red winter wheat lost 6 ¼, December hard red winter wheat was 5 ¼ lower, December hard red spring wheat gained 5.
Grain markets were mostly lower for the week, except soybeans, as they started their preparation for the Crop Production and WASDE reports on November 14.
Expectations for Corn in the November Crop Production and WASDE
Jerry Gulke, president of the Gulke Group, says private estimates for national corn yield range from 182 to 186. However, he expects a bearish report because yields may be higher than expected. “I’m also hearing from clients in Iowa, Minnesota and other places that say their yields turned out better than they thought and better than average,” he says.Those were the same areas where farmers had weather adversity from too wet to too dry and anticipated corn yields would fall below their APH or Actual Production History. Gulke says it would take a yield of 180 bushels or less to have a price impact but even if yields fall to that level, he doesn’t think USDA will acknowledge it until the January report.
USDA also has to incorporate the additional 207 million bushels of old crop corn found in the September Quarterly Stocks Report into the 2025-26 balance sheets.“Remember we were talking about 1.3-billion-bushel old crop corn carryout and then they found 200 million bushels of non-feed usage.Which if it was just added on to the 2025-26 ending stocks estimate would be over 2.3 billion bushels,” he says.
In the November WASDE Gulke says there will be some adjustments to corn demand and maybe even a few surprises.“I have a feeling that the demand side could be less than what we though, and that would then offset some of the reduction in the yield,” he says.
In the final report in January Gulke says USDA will be able to see what the usage was for the first quarter of the 2025-26 marketing year and that includes feed and residual.“They’ll then back themselves into that feed and residual estimate after they know what exports are and ethanol use is, and add the crop size and the carry in,” he explains.
Expectations for Soybeans in the November Crop Production and WASDE
Gulke says he would be surprised if USDA made significant yield reductions on soybeans in the November Crop Production report in fact, he thinks the agency could even raise yield a half bushel or more because of the outstanding yields in the Northwest Corn Belt. In addition to his farm in Northern Illinois, Gulke also farms in Northern and Southern North Dakota.“And of course in the Northern half of North Dakota we got hit with hail and some frost. However, in the South yields were good,” he describes.
The market will be closely watching how USDA incorporates the purchase agreements from China into its soybean export projection and how the market reacts to those estimates.Gulke says the soybean market started to rally before the announcement of the trade framework with China.“As part of the price discovery process soybeans dropped to $9.78 when the market thought China was going to be out of the market but with China expected to purchase 12 MMT of soybeans that’s when we rallied $1.20.”So, he says the market will now need to see the purchases and have them reflected in USDA balance sheets to hold these price levels.
How Should Farmers Prepare for the Reports?
Gulke says heading into the November reports farmers should be taking some protection through options strategies because there is a large amount of uncertainty tied to USDA’s data dump.He says they sold all of their corn and soybeans and bought cheap calls.“We bought $4.30 December calls for about $.06 and that’s about where corn is now, about $4.28 and change. So, we’re about even money on 40% of the crop,” he explains.
On soybeans, Gulke says they had the same strategy and he advises farmers to also be proactive because it’s rather cheap insurance in case USDA provides any surprises in the WASDE or Crop Production report.
For more information you can contact Jerry at info@gulkegroup.com.
