For the week December corn lost 2 ¼ cents, March corn fell 1 ¼, November soybeans plunged 27 ½, January soybeans fell 27, December soybean meal was down $5.00, December bean oil dropped 91 points, December hard red winter wheat lost 14 ½, December soft red winter wheat was down 15 and December hard red spring wheat fell 15.
December corn futures were lower on Friday and lost over 2 cents for the week, yet still managed to close above the 50-day moving average.
Corn Market Shows Resilience
The performance was a victory, says Jerry Gulke president of the Gulke Group, considering the large infusion of bearish news the corn market had to absorb again this week, including tariff uncertainty and more private estimates of record corn yields.
He says this action continues to confirm the early low in corn set on Aug. 12.
That was the day of the August WASDE report when corn made a new contract low and closed well off that level, a sign of bullish divergence in the face of the bearish record corn yield USDA projected at 188.8 bu. per acre.
Gulke says since then the corn market has rallied nearly $.25 and has shown considerable resilience.
“I am encouraged now that after a month or so of listening to just about every negative fundamental that you could conceive of, I mean, I bet I could pick this week alone probably 10 or 15 things that are negative and fundamentally, and yet the market kept going up.It kept shrugging off even private estimates by StoneX, S&P Global and by Allendale, up near the higher range, close to where the USDA is,” he explains.
Several private firms released their yield estimates this week and most shaved one to three bushels off USDA’s record August yield of 188.8 bu. per acre.
Allendale was at 187.5 bu. per acre, StoneX at 186.9 and S&P Global at 189.1.
Is the Corn Market Focusing Too Much on Supply and the Storage Crunch?
Gulke thinks the corn market has been too fixated on supply and the record crop size.
He points to USDA’s storage data which shows in major corn producing states there is 25 million bushels of storage available for this year’s crop.
“So if you add up 15 billion bu. of corn, four billion bu. of beans, that’s 19 and I don’t know about what we produce five or six billion bu. in the small grains, you know barley and oats and all that stuff. We have enough storage, not maybe all in the right places per se, but we have enough storage to handle the crop,” he explains.
Plus, Gulke says the June 30th Quarterly Stocks Report showed there’s 47% less corn stored in farmer’s hands than a year ago.
If that wasn’t the case he thinks the market would have seen more farmers selling old crop bushels at the end of August to make room for the 2025 crop.
“We did not see the capitulation that we saw the last day of August last year.In fact, when we went from September to December as the lead contract on Tuesday of this week we gapped higher by a bigger amount than the gap last year which produced a $.70 rally,” he says.
Is the U.S. Corn Crop Getting Smaller?
Gulke says the U.S. corn crop could be getting smaller based on the reports of late season diseases like Southern Rust and Tar Spot and flash drought in parts of the Eastern Corn Belt.
So, the old adage that big crops get bigger may not hold in the September WASDE report but at the same time Gulke’s not sure the yield will come down much, at least this month.
Marketing and Storage Strategy
Gulke is waiting until the September 12 WASDE Report to make the next move in the corn market just in case USDA doesn’t confirm lower corn yields.
“I think our strategy will be to sell cash, which we haven’t sold much of it.Most have been in hedges or hedge to arrive.We might do more cash because I don’t want to store soybeans.If I can see daylight ahead somewhere I would probably start selling cash corn because I don’t want to pay commercial storage,” he adds.
Gulke just finished a Top Producer article about on-farm storage versus commercial storage.
“On-farm storage costs are good compared to commercial storage and you lose big time if you take your grain to an elevator with the wide basis,” he says.
He calculated that by March 1, including the carry in the grain market minus storage, he lost about 36 cents per bushel.
“That’s $72 an acre on 200 bushel corn.And so why would anyone accept that if they can’t find a place to store this stuff?”
For more information contact Jerry at info@gulkegroup.com.
