For the week March corn was 7 cents higher, January soybeans gained 4 ¼ cents, January soybean meal fell $4.50 per short ton, January soybean oil surged 123 points, March Soft Red Winter wheat was up 9 ¼ cents, March Hard Red Winter wheat gained 13 cents, March Hard Red Spring wheat tacked on 3 cents and January canola was up $34.50.
The first full week of trading in December can be enlightening and Gulke Group president Jerry Gulke says this year is no exception, especially after the 2024 election.
Last year the corn and soybean markets topped on Jan. 2 but at much higher levels than the current prices.
He says a lot of negative news is already known today that was not known a year ago.
The bulk of that news may already be priced in, including large ending stocks, plus election results and possible tariffs.
Gulke believes most of the bearish news from the last three years is also priced in just looking at a weekly corn continuation chart from 2022 through 2024.
“Price action on a three-year corn chart is daunting to say the least, but the next move in prices is likely to be established the end of 2024 and during the first quarter of 2025,” he says.
Until corn prices can exceed and sustain a close above last fall highs of $4.35, he says a bull market may only be on farmer’s Christmas wish list.
Gulke says historically corn and soybean markets have a seasonal tendency to set trend from Thanksgiving to the end of the year because they have factored in much of the fundamental news, including the size of the crops.
“By then we have about a 99% confidence level in the yield and farmers have put the crop away for the winter and so now it’s not about supply any more, it’s about demand,” he says.
He says the market is starting to look ahead to try to determine if the U.S. is going to gain market share because prices are more than a dollar less than last year for corn and even more than that for soybeans.
USDA has reason to raise demand for corn in the upcoming WASDE, according to Gulke, with strong feed demand, current corn export commitments running 33% ahead of last year and three consecutive weeks of record ethanol production.
“So, is old crop corn carryout at 1.9 billion bu. or are we more like 1.6 billion?If we shave another 300 million bu. off supply that would be supportive,” he says.
This year the market also had to digest the results of the U.S. election and possible tariffs.
“I always look at how the market reacts coming out of Thanksgiving and going into the first week of December to determine price direction. Post election the corn market not only held but rallied the first week of December and had a chart breakout, which tells me it has digested the tariff and election fears,” he explains.
So, the good news is corn prices have already absorbed the most bearish news and tested the pre-2020 levels.
Gulke says the bad news is that prices are back to what was considered high priced pre-2020 when farmer’s wish lists included $4.00 corn.
For more information you can contact Jerry at info@gulkegroup.com.
