Row crops had higher weekly closes for the first time in several weeks. November soybeans led the gains up nearly 46¢, December soybean meal was 30¢ higher, with December bean oil up 387-points. December corn closed up 5.75¢ for the week, September Chicago wheat was down nearly 15¢, September Kansas City wheat finished 5.25¢ lower and Minneapolis wheat was down 12.5¢.
Jerry Gulke, president of the Gulke Group, says the higher weekly closes in corn and soybeans were encouraging and driven by weather concerns. The markets added back some risk or weather premium with the hot, dry weather and forecasts for 90°F and 100°F temperatures continuing into next week. That could negate some of the benefits of the rains earlier in August and trim yield potential.
The higher weekly close in the November soybeans is bringing technical buying interest back into the markets, and Gulke says there are other positive technical signals that could keep the market running higher if the weather confirms. “There was a key reversal at the $13.54 area, and we are closing in on that resistance area on the charts,” he says.
Gulke cautions he’s seen markets flip over a weekend when weather forecasts look hot and dry and don’t confirm. “This time of year, a dramatic change can come from hurricane activity that brings rains or cooler weather to the corn belt.”
Corn got spillover support from soybeans, but there is also concern about yield being impacted with heat hurting the corn during the filling stage.
Gulke says the technical action was also positive this week in the corn market. December broke through the $4.81 July low on Tuesday and hit a low of $4.73. That’s a level the market hasn’t seen in new crop corn since December of 2020. However, Gulke says once that area was taken out there wasn’t much follow through as farmers had no interest in selling at that price.
“Well, it tells you there wasn’t anybody under those markets to sell anymore,” he says. “Nobody was interested in selling; I know I wasn’t. In fact, we started buying our hedges back when that happened.” He says it was encouraging to see the market close back above that level on Friday.
Gulke doesn’t think the grain markets will go much lower until more is known about the yield. He says the funds don’t want to push the short side of the corn and soybean market, or even wheat, until they get more clarity from either crop tours or actual harvest data.
A majority of Gulke’s clients are echoing what he’s seeing in his own fields, which is variability. “A third of our corn has got some kind of tip back. And what’s left is not bad, but it sure isn’t a perfect crop.” He says they have been asking their clients if their crop was as good as last year and the answer is pretty consistent. “Outside of Ohio, not one person said it was, in fact they even laughed that we insinuated that.”
Gulke believes the first boot in the field surveys will confirm that. “I’m thinking the Pro Farmer Crop Tour might find that tip back in the corn. That, in his opinion, will make it difficult to get a national corn yield over last year’s 173 bu. per acre, and he says just a bushel loss in soybeans will tighten the ending stocks down to pipeline supplies.
