For the week, July corn was 1¼ cents higher, December corn gained 2¾ cents, July soybeans were up ¼ cent, November soybeans fell 8 cents, July soybean meal was up $7.40 per short ton and July soybean oil was down .02. July Chicago wheat lost 14¾ cents, July Kansas City wheat fell 38¼ cents and July Minneapolis wheat dropped 39 ¾. Canola plunged $24.00.
The corn and soybean markets saw very little movement for the week. Jerry Gulke, president of the Gulke Group, says it reflected the lack of change in the June WASDE.
“There wasn’t a lot of surprises. Normally that June Report doesn’t have many surprises because we’re so close to the big reports at the end of the month and USDA doesn’t like to do much until they have more information,” he says.
USDA left new crop ending stocks on corn at 2.102 billion bushels and old crop remained at 2.022 billion. The agency raised old crop soybean carryover 10 million bushels to 350 million, which was carried over to the new crop balance sheet raising it to 455 million. The only change in South American production was a 1 million metric ton cut in Brazil soybean production.
Gulke says the market is now focused on USDA’s June Acreage Report.
Farmer surveys were taken the first 10 days of June. Even though it was extremely wet in areas of the Corn Belt, the rain fell after the crop was planted, which caused some replant.
Gulke thinks most farmers surveyed likely said they intended to plant the last of their corn and soybean crop, and if they couldn’t get it replanted, it will be reported as unharvested acres.
“So, it doesn’t look to me like there is going to be a lot of change in the acreage in that report,” he says.
Gulke admits a million-acre swing either way could be important, but he thinks the market is acting like there will be fewer corn and more soybean acres.
“One million acres of corn is about 180 million bushels. If we didn’t get the crop all planted, suddenly we’re under a 2-billion-bushel carryout and we haven’t addressed weather yet going forward. Of course, if we have another million acres of beans that’s 50 million more bushels, which makes carryout even bigger,” he says.
The one exception is in the Dakotas and Minnesota where Gulke says there will be some prevent plant. However, the amount is in question. Gulke says USDA probably doesn’t want to speculate on prevent plant until they get more insurance data.
Wheat saw considerable pressure again in all three exchanges this week.
USDA did lower Russian wheat production in the WASDE by 5 million metric tons to 83 mmt, but Gulke says the lower Black Sea and Russian crop has already been priced into the market.
“Chicago wheat was up $1.40 in anticipation of the lower Russian crop, but bull moves are only good for about six weeks,” he says.
Technically, Gulke says the weather rally in Chicago wheat completed the third of three moves higher and retested that chart area five or six times. When it could not take that area out it fell apart.
“As a result, wheat broke trendlines on the charts and has retraced almost $1.00. The job of the market is price discovery,” he explains.
This week, July Chicago wheat also took out the 50-day moving average just as harvest starts in Illinois.
Plus, he says the hard red spring wheat and hard red winter wheat crops look much better than a year ago.
For more information contact Jerry at info@gulkegroup.com.
